STANDING COMMITTEE ON RESOURCES
Mr. Raymond White
MR. CHAIRMAN: I would like to call to order the Standing Committee on Resources. Today we have a presentation from the Nova Scotia Federation of Agriculture.
Following their presentation, the second item on the agenda is future witnesses and at that time we will circulate some of the suggested witnesses for the committee for consideration. Is that agreed as an agenda for today?
At this time I would like to welcome Mr. Laurence Nason who is the Chief Executive Officer and Mr. Anthony Van Oosten, the First Vice-President. Prior to the meeting, the two gentlemen agreed to do a presentation and the normal format would allow for questions following the presentation but if there is something quite pertinent that you may want to ask as we go through the presentation, if you indicate to me, either one of the gentlemen have indicated they would attempt to answer your questions.
So having said that, gentlemen, I will turn the first part of the meeting over to you for your opening comments, either related to the information you have provided or your presentation.
MR. LAURENCE NASON: First of all, Mr. Chairman, on behalf of the federation, we want to thank the committee for taking the interest and the time to listen to some of the issues that we feel are important to the agricultural community. I guess we think that this kind of dialogue is important - important both to you, as legislators, and important to the agricultural community.
I don't know how you want to proceed. I sent a brief which I assume has been distributed to your committee last week. Do you want to go through the whole preamble or just touch on the highlights and the meat of some of the issues that we have put in the brief?
MR. DONALD MCINNES: I read it but I would be happy if you touched on the highlights and kind of summarized but whatever the rest of the committee wants, it is fine with me.
MR. CHAIRMAN: Is it agreed by the committee for an approach? Most of you have had a chance to read it.
MR. NASON: So I will just touch on the highlights briefly. Basically, I see one or two faces around of people who may be familiar with agriculture and the Nova Scotia Federation of Agriculture. Just briefly, the federation is a 100 year old organization that is the recognized voice of primary agriculture in the province. The federation is structured geographically into 13 regions and we have 13 affiliated regional or county federations and 20 provincial commodity groups that represent virtually every agricultural commodity in Nova Scotia with the exception of ratites which are emus and such.
Our mandate, I guess, stated very briefly, is taking whatever actions are necessary to ensure a competitive and sustainable future for agriculture and a high quality of rural life in Nova Scotia. Over the past year, or the past couple of years, one of the things I want to point out is that I think the federation has been very cooperative with provincial government authorities. The federation has always had an excellent relationship with the Nova Scotia Department of Agriculture and Marketing and other departments and has worked closely with the government to meet their fiscal goals that they have set over the past couple of years.
One of the things we have noticed is that while the government planners appear to recognize the importance of agriculture to the economy and to the rural social structure in Nova Scotia, while that appears to be recognized in some of the planning documents, it has not been evident in the past couple of years in the policy choices that the provincial government has made with respect to the development of agriculture in the province. I guess we feel that agriculture has a bright future, that public investment in the industry is warranted and we feel that the industry deserves better treatment than it has had in the past couple of years although it appears that the cuts that have been made to the agricultural industry in Nova Scotia are similar, percentage-wise, to the cuts that have been made in other sectors. In many cases, when they are coupled with the retrenchment of the public investment from the federal level, there have been some real disastrous results.
We consider all the challenges that face the agricultural industry as resource issues. I don't know what you deal with here at this committee. As I said, we think that all of the issues we deal with are basically resource issues. We want to outline four issues today. However, there are a number of other issues that naturally flow from these issues that we think you might be interested in that we want to touch on that aren't highlighted in any detail in our brief.
I guess the first one that we want to talk about is farm acreage taxation. It is probably not necessary for me to go through a detailed history. Last year the provincial government cut a $1.2 million grant to municipalities. It was put in place in 1978 to compensate local governments for tax on agricultural land or for providing preferential tax treatment to agricultural land. It was done with no consultation with either the Union of Nova Scotia Municipalities, the Federation of Agriculture or the Department of Agriculture itself. I think we found out about it at the same time the Deputy Minister of Agriculture found out about it.
We believe that a mistake was made. In fact in a meeting last week I think the Premier indicated that perhaps a mistake had been made when that action was taken, and it is something that the agricultural community feels very strongly about. Following the budget decision last year, the federation agreed to take the lead in a task force to look at the issue and try to develop some kind of rational set of policies to deal with the protection of agriculture land in the province.
We set up a task force and involved the Union of Nova Scotia Municipalities, the federation and representatives from the Department of Municipal Affairs and representatives from the Department of Agriculture and Marketing. That task force worked through last winter and came up with a set of recommendations that are in the report in Appendix A. Those recommendations met with the approval of the agricultural community, however, the Union of Nova Scotia Municipalities has rejected them. We do not see the rejection by that organization as being totally negative because their objections were not based on the principles that were involved. They are based more on administrative and political concerns.
In any event, in the meantime we still have a situation in Nova Scotia where there is a different tax policy to deal with agricultural land. Some municipalities are paying one-half of the $2.10 levy that the legislation allows them to put on land. Some municipalities are not charging it, other municipalities are charging it. We think because there hasn't been any action taken again this year that there will be an even greater mix of policies.
What we have done is ask the government to take some remedial action this year. First we have asked for further changes to be made to the Assessment Act. Perhaps I need to go back. Do you want me to review the changes that were made last year to the Assessment Act that resulted in the situation we have now? Basically, the Financial Measures (1996) Act amended the Assessment Act to allow municipalities to charge $2.10 per acre of farm
acreage; that is the farm acreage that is listed on the assessment role. There was an eleventh hour amendment passed that allowed municipalities to exempt farms that were registered with the farm registration system from the taxation.
What we have asked the province to do this year is amend that Assessment Act farther and allow municipalities to charge the full residential resource rate on agricultural land that is non-active. We define active and non-active through the farm registration system because it is the best vehicle we have to do that. So basically if land is registered, we assume that it is active. If it is not registered, we assume it is non-active.
What we have asked the province to do basically is provide local governments with more flexibility to deal with the situation that has been thrust on them. It means that they can raise more revenue and they do not have to provide any benefit at all to the land that is not agricultural land. The second thing we have asked them to do is to compensate municipalities who, in 1997-98, forgive the $2.10 levy on the agricultural land. In a letter last week, the Minister of Agriculture and Marketing informed the president of the federation that there would not be any changes to the legislation this year and that there was no money, obviously. There was no money. That is the standard paragraph, the last paragraph in the correspondence with government departments these days.
Anyway, we think that that is unfortunate. While the union has requested that we keep the task force going, and as I mentioned before, we do not look at the fact that they have rejected the recommendations as being negative because it is a complicated issue, and the more time we spend on it the better policy mix that we will be able to recommend to government in the end. However, it creates situations across the province whereby a farm in one municipality will have a large tax bill, a neighbouring farm across the municipal line may not have any tax bill. That puts some farms in a better competitive position than other farms, particularly in the horticultural industry where they operate on virtually pennies.
It is not an issue that is going to go away. From the standpoint of the agricultural community, it is not a monetary issue. It involves the protection of farmland for the future and it involves the economic and social benefits of farmland. The only issues that both provincial and local governments seem to want to bring to the table at this point are mercenary or monetary issues.
As I said, the task force is going to continue to examine the issue. We talked about pilot projects in a couple of the municipalities across the province, and we are also going to investigate how we can utilize GIS systems and some of the new technology that both Agriculture, and Municipal Affairs have.
One thing that we can talk about today, if you would like, is the uniqueness of agricultural land as a resource. Basically what the province has said is that it is a local government responsibility. We do not think it is. We think it is a provincial responsibility.
Local governments do not have the same kind of understanding, do not have the same interest in agricultural land. If you look at agricultural land as real property, it certainly does not fit in with the kinds of real property that local government has traditionally used as their tax base. For example, agricultural land does not require transportation services, agricultural land does not require social and recreation services or protective services, nor environmental services like sewer and water, garbage collection and those kinds of services. Farmers do pay on their buildings; do pay for those services and have no problem paying for those services.
I can provide you with county by county or region by region or provincial figures, I do not have them with me today, that indicate the economic importance of agriculture in each area of the province. However, we think in addition to that economic importance, there are other important reasons to protect the agricultural land resource in Nova Scotia. Basically, it provides the views and the vistas that we enjoy and the tourists enjoy, and certainly there is large public investment made in the tourism industry. If it is not protected in some way, it will go to the highest value use or the highest use which is not agriculture, which is usually some type of non-renewable use. If you look at the land patterns in Nova Scotia, most of the high-value agricultural land with the high-value agricultural operations on it is in close proximity to urban areas, or is in areas where it has now been surrounded by communities which have distinctly urban values and not rural values.
We think unless something is done in this area immediately that much of that land will probably revert or be turned into non-renewable type of uses. We think that is unfortunate and we do not think it is acceptable. Again, we think it is a provincial responsibility to protect that land. It is too large a responsibility to lay on local governments. They do not have the technology to understand it and to administer it the way it needs to be administered.
The other thing that is interesting here is the fact that one-third of the tax that is paid on agricultural land in Nova Scotia is paid by beef producers. They pay about $400,000; that would indicate that they control roughly one-third of that agricultural land resource.
I am sure most of you are aware that the beef industry has suffered tremendously in the past two years, is still suffering, and the taxes that beef producers have to pay on that land are just one more thing that they have to absorb, along with higher grain prices due to the absence of freight subsidies on grain and so on and so on. So it is a good possibility that a lot of that land will move in the next year or so to some use other than agriculture. It will grow up in bushes or it will be sold for, I guess what they call in Western Canada, ranchettes, where people from towns buy a 20 or 30 acre lot in the country because the land is cheap, don't utilize it for agriculture and it is lost to agricultural purposes.
The next issue that we want to talk about is the endangered species legislation. I guess the first reading was in December, just before the House closed. Again, I can go through the history of the development and the relation to the federal legislation, if you would like. I guess from an agricultural landowner's perspective, that particular piece of legislation can only be
described as very disturbing. As a group, we are one of the largest private landowners in Nova Scotia, both in terms of agricultural acreage, including wetlands and forest acreage. Collectively, the agricultural community has invested heavily in protecting and enhancing the environment and the ecosystems in which we all live and work.
Farmers in Nova Scotia have a long history of working cooperatively with government agencies and conservation groups and among themselves to protect wildlife habitat and the environment. The most recent example of that includes the development and implementation of an environmental farm planning program, which is a self-imposed program that, since the first of January, 150 farmers in Nova Scotia have developed environmental farm plans that identify problems in their particular operation and have developed strategies to correct those problems over the next 5 to 10 years. I think the point is that agricultural landowners don't have to be forced to become responsible when protection of the natural environment is in question and this legislation uses force to ensure compliance.
The Nova Scotia Environment Act, and it is supposedly one of the toughest pieces of legislation of its kind in Canada, imposes some relatively costly management and technological changes on farm businesses in Nova Scotia but that Act has been accepted by the agricultural community. The primary reason for that acceptance is the underlying philosophy that guides that legislation and that philosophy is one that develops stewardship, it is one of voluntary cooperation and the use of conflict resolution rather than punitive measures as a means of enforcement.
The proposed endangered species legislation prefers to threaten reprisals rather than encourage individual or collective stewardship and cooperation among the stakeholders, and it prefers to view landowners in a very negative way. It prefers to view them as individuals who are intent on destruction, and need to be controlled in some manner rather than as intelligent human beings with a contribution to make in realizing the goals that the government has actually set out for the Act. I want to emphasize that if there is one thing that farmers in general don't do, that is abuse the environment. That is where they make their living; that is their workshop. They have to keep it in good shape.
The first question that is prompted by that legislation, is we wonder whether the rest of the community would be prepared to make the same kind of socio-economic sacrifices that are being forced on rural residents to protect threatened and endangered species, without any compensation. I think the answer to that question is apparent in the lack of any mention of compensation to affected landowners for loss of income and loss of opportunity with regard to their land. The protection of wildlife and wildlife habitat comes at a cost and we don't think that the private landowner in Nova Scotia should be saddled with that cost, particularly when the benefit that is going to be created is one that everyone is going to share. The concept of equality demands that one small segment of the community must not be encumbered with the cost of creating a good that benefits the entire community.
The Act, we think, must include provisions to compensate landowners whose lands are affected by the provisions in that legislation. We think it takes a very singular approach to the protection of the environment. It focuses on just one particular area of the ecosystems that rural Nova Scotians and farmers live in and work in and it just focuses on protecting endangered species. The ecosystems in Nova Scotia, in our opinion, are an amalgam of many valuable resources and those resources include farmers, they include the crops that they grow and they include the livestock that they keep. We think that any legislation of this kind has to consider and has to address the concept of ownership and the concept of private-public partnerships and the concept of stewardship that is built through cooperation.
There is an appendix in the back of the report that we have provided that provides a list of the changes that we think need to be made in the legislation. I guess our one hope is that this legislation was drafted by a bunch of bureaucrats somewhere and that nobody else has seen it and that somehow it escaped and got into the hands of the public. I think certainly when people read it who are sensitive to rural issues, who are sensitive to the way that the agricultural community and most rural residents, in fact, deal with the environment, that there will be some changes made.
The next issue that we would like to talk about is the protection of marshlands and here we want to focus on one particular case, and that is the Bishop-Beckwith Marsh that is behind the Town of Wolfville. Basically there is a group of farmers, who are landowners on that marsh, who have been forced to go as far as the Supreme Court to protect that particular bit of land for agricultural use. That land is part of what is classified as one of the three best agricultural areas in Canada and we think it is a ridiculous situation when a group of farmers have to go to court, at their own expense, to protect land for agricultural use. What they are protecting it from is the Town of Wolfville, that would prefer to develop that, zone it commercial, and develop a shopping centre complex out on the marsh. We think that is unacceptable and it is a situation that can be corrected very easily with legislation.
There are legislative and regulatory solutions that can correct that situation and other situations that are bound to arise in the future in marshlands in Nova Scotia. We are at a loss to know why someone hasn't realized that and taken the steps to protect that particular land. We realize it takes a bit of intestinal fortitude to tell urban municipalities that they can't willy-nilly develop on agricultural land, but we think it is time that somebody started to do that or we are going to lose that particular marsh and probably more of the marsh around the Truro area and other marshes in the Grand Pre area and in Annapolis County.
[1:30 p.m.]
The other area that we want to touch on is the Agricultural Operations Protection Act. We refer to it as the right-to-farm Act. Basically, the current Act, the Agricultural Operations Protection Act, was effectively emasculated by the new environmental legislation. We have worked with the Department of the Environment and the Department of Agriculture
over the past year and there is a protocol in place now that allows the Minister of the Environment to defer to the Minister of Agriculture, on agricultural issues. There is a section in that Act that allows that to happen. Once that happens, then the Minister of Agriculture can use the Agricultural Operations Protection Act to appoint a group of knowledgeable people to try to mediate the situation.
One of the things that we would like to do cooperatively with government in the coming year is to review that particular legislation because we think that it leaves farmers open to nuisance suits by the public, some of which may be unreasonable, and we don't think that the current legislation would stand the rigours of a court challenge. That concerns us because of the fact I mentioned earlier, in many of the most intensively farmed areas of the province, those areas are surrounded by people with urban values who are sometimes offended by the sights and the smells and the sounds of agriculture.
In conclusion, Mr. Chairman, I think we are entering a period when the outlook for the agricultural sector in Nova Scotia can be described as relatively uncertain and our producers are being called upon to adapt to a whole array of innovation in their operation. We are continually buffeted by external forces over which we don't have any control and we are continually pressed to take responsibility for problems that extend well beyond the farmgate.
While that outlook is uncertain in a rapidly changing world, we think opportunity abounds for the agricultural industry in Nova Scotia. However, each of those opportunities seems to be coupled with some level of constraint that threatens to neutralize any advantage. I think sound public policy, if it can't eliminate those constraints, can ease their impact on our industry. The areas discussed above are just some of the areas that we are concerned with. So if you have questions, we can try to answer them.
MR. CHAIRMAN: Possibly, before I entertain questions, I forgot at the beginning to ask the members to introduce themselves.
[The members introduced themselves.]
MR. CHAIRMAN: If I could ask for one clarification of a term. You mentioned several times, and I think as your presentation came along I understood more and more what you were saying, but when you talk about protection of farmlands, protection of the resource, would that then draw the observation, protection, for example, of encroachment of the urban areas? Do you want to elaborate on that a little bit?
MR. NASON: Yes. My reference to protection of agricultural land was with reference to the issue of the land tax. There are a number of ways in which jurisdictions all across North America protect that resource. In almost all cases, one of the ways that resource is protected is to provide preferential tax treatment for active agricultural land. As it was here in Nova
Scotia, that preferential tax treatment is balanced to some extent by change-of-use requirements that allow the community to recover some of the benefit they have provided to that resource back if the individual who has received that benefit decides to take that land out of the resource. So we use the protection of farm land, I guess, as a broad term in that context.
MR. CHAIRMAN: Okay, I will recognize the committee members.
MR. MCINNES: Welcome to the representatives, Laurence and Anthony, from the federation and congratulations on your 100th Anniversary. It is quite an organization to be going that long. Mr. Nason, you talked about your relationship with the government over the years and that there was always good feedback between the Department of Agriculture and the federation. I know that over the years, and I am not only talking about when we were in government but previous Liberal Governments, there was always excellent feedback.
I might say, Mr. Chairman, the three members from Pictou County met with the milk producers yesterday in Pictou County and they were telling us of their concerns and things that are happening and the cuts that are taking place without any discussion. I think one of the things they mentioned was the Livestock Health Services Act. It is rumoured now to be being cut and the other one, of course, is the Dairy Commission. They are talking about cutting $50,000 out of that budget.
MR. NASON: And $200,000 from Livestock Health Services.
MR. MCINNES: I guess my question, again, is you are saying you are getting letters back from ministers saying there is no money and I understand that the government is trying to balance the budget but at what cost, I will say that. I think they should be meeting with you and discussing what things you could cut out of the various programs. There were a lot of programs, and I don't have that list here with me today but there are quite a number of them gone and maybe rightly so. Times have changed and I want to be fair about it but some of the things you should have an opportunity to talk about even like the land tax, the assessment. I think from reading the report briefly, I think the task force did a good job, it had a good recommendation. But again, I guess, that relationship is not as good - and you did say that but maybe you would like to expand on it or whatever.
MR. NASON: Yes, just to comment on that relationship and I have only been involved directly, working for the federation for a year and one-half. I was a farmer, or I am married to a farmer, for 25 years. Traditionally the relationship between the agricultural community and the NSDAM was one that was envied and studied by other governments in Canada and governments from other jurisdictions. That relationship is certainly still there. I think that lots of times even some of our members think that we are part of government.
However, I guess the consultative process can be defined in a number of ways. There is one way, there is one type of consultation where you are called to the table and you are told what is going to be done and this has been our consultation. There is another kind of consultation where you are called to the table and you are asked for options. This is what has to be done, let's take a look together at the options. The kind of consultation that we have seen more and more in the past year has been the kind where basically the federation is consulted but the consultation is a process where we are told what is going to happen and not given a chance to look at the options.
It is difficult to understand because two years ago, basically the programs that were being provided by the department, the direct farm programs that were being provided by the department three years ago - I shouldn't use figures, I don't have the exact figures with me but I will send you those figures, Mr. Chairman - I think it was approximately $8 million that those programs were costing. The federation met with the government. The farmers in Nova Scotia realized the fiscal position that the government was in and they sat down and worked out a program that was acceptable to the agricultural community and that was certainly acceptable and fit in well with the province's fiscal planning and the result of that was the Agri-Focus 2000 program. Basically, there was a commitment made to spend $5.5 million on that program for a period of five years. What the federation, if you like, bargained away was $8 million of program funding in exchange for a more flexible type of program that was going to cost the government $5.5 million a year. That program was cut, without consultation, by $1 million last year. We are in a position now where one-half of the farmers in the province have had an opportunity to take advantage of that program; the other one-half have not had an opportunity to take advantage of that program.
Again, the sector that has probably been the most hurt by that is the beef industry. Anthony is a good example because the other sector that was hurt by that is the fruit growers who were in the process of developing a strategic plan to try to gear their whole operation up to future markets. So, naturally, the fruit growers did not want to get involved in capital projects on their farms until they found out what the markets were going to be, how they could service them.
So, that is an example of the type of cooperation that, for 100 years, has been there and the type of cooperation that the federation prefers to have. If there are problems, we want to sit down and take a look at the options, particularly with some of the cuts that have taken place recently. They impact Livestock Health Services. It does not impact on Kings County and Truro where the concentrations of livestock are. It is sure going to be pretty hard for a guy in Victoria County to get a vet to come to his farm.
MR. MCINNES: I have three or four questions. I will do another one and then somebody else can have a turn. You did not mention much about the farm registration and I think that has worked pretty well, but you did mention that you would like to have the
farmland acreage under the registration program be exempt. What kind of a response did you get from the Department of Housing and Municipal Affairs?
MR. NASON: There are some people in Nova Scotia who do not think that they should have to register their farm to indicate that it is active agricultural land. I guess our attitude to that is, if you want the prize you have to answer the skill-testing question. You do not get an income tax return unless you fill out the form. You do not get your Canada Pension unless you fill out the form to qualify for it. We do not see registering agricultural land, in other words, indicating that you are a bona fide farmer is any different than that. That is the system that we have chosen because it is there. It is developed to identify active agricultural land.
A direct answer to your question, I do not know how the Department of Housing and Municipal Affairs feels about it. However, some of the municipal politicians did not like that. They felt that everybody should get the exemption whether they were able to prove they were actually using the land for agriculture or not. You see, for the past 20 years there have been 200,000 acres of agricultural land in this province that have received a tax holiday. There are approximately 600,000 acres of land listed on local governments' assessment rolls. There are approximately 400,000 acres of land that are registered by active farmers in the province. So, there are 200,000 acres of land somewhere that have received a tax holiday. We do not think that is right. We think there is a way that local governments can recoup some of the revenue that they lose by providing preferential treatment to active land.
MR. MCINNES: Can I just do one more and then I will stop, but just a quick one. Approximately how many farmers are not registered? You fellows must have some idea, 20 per cent, 10 per cent?
MR. ANTHONY VAN OOSTRUM: If you go by acres, we get about 90 per cent, if you go by . . .
MR. NASON: There are several factors here; the federation membership and then there are registered farmers. There are about, and Dave Robinson might be able to provide a more accurate figure, 2,100 registered farmers, Dave, in the province approximately?
MR. DAVE ROBINSON: I think it is 2,100 or 2,200 and your membership is 1,800.
MR. NASON: Our membership is between 1,700 and 1,800. However, you see the definition of a farmer, a farmer is actually defined here and everywhere else in Canada by the federal income tax system. Anybody who makes or loses $250 per year is eligible to file a farm income tax form and that defines him as a farmer.
MR. MCINNES: I will pass. If there is time I will get more.
MR. CHAIRMAN: Are there any further questions from committee members? Well, I do not think there are. So, I will pass it back to you.
MR. MCINNES: The Endangered Species Act, you mentioned that one as well. I think there is a hearing tonight in Truro?
MR. NASON: Tomorrow night.
MR. MCINNES: Will you be making a presentation?
MR. NASON: We were told that we could not make presentations at those hearings.
MR. MCINNES: I beg your pardon?
MR. NASON: We were told we could not make presentations at those hearings. In fact, last week we were told that we had to register to attend them.
MR. MCINNES: I am sorry. I may be a little deaf. I missed the last part of it.
MR. NASON: We were told that we could not make presentations at those hearings. We were told last week that we had to register people who were going to attend. I think that the Department of Natural Resources is taking a little license with the word, consultation, in this case. They originally scheduled the hearings in Sydney, Yarmouth and Halifax. Not really good places to catch the major group of land owners who have a concern with this legislation. They have scheduled a hearing in Truro for Friday night. There is one in Dartmouth tomorrow night. There is one in Yarmouth Thursday Night. There is one tonight in Sydney. We will have representation at all of those "hearings or consultation processes", but we have been told that it is not a forum where we can present a brief.
MR. MCINNES: So, the comment that you have given us in this submission, you are going to give that to the minister?
MR. NASON: Those comments will go to the Minister of Natural Resources and the Minister of Agriculture. I will also be making a presentation to the Law Amendments Committee.
MR. VAN OOSTRUM: There is one at the Holiday Inn tomorrow night?
MR. NASON: Yes.
MR. VAN OOSTRUM: If you take the Valley region, I mean there is none in Wolfville or in Kentville. I think it would have been a lot better if there would be one in the Valley region where probably over 50 per cent of the agriculture is.
MR. NASON: The other area that has a real interest in this whole thing is up in Cumberland County. We have had calls from farmers who own land on the marshes up there and they have an interest in this as well from both standpoints, from how it may affect their rights to use their land and because they are concerned about protecting endangered species. They work very closely with Ducks Unlimited up there in most cases.
MS. EILEEN O'CONNELL: I have a question that relates to something that you have not mentioned at all. So, I was just wondering whether the members of your federation have discussed at all the effect of the HST on their businesses and what some of those might be?
MR. NASON: Yes, the effect of the HST. We have not been too vocal about it but basically the harmonized tax is good for agriculture. It means less paper work. It actually means less tax on some agricultural inputs. It broadens the base of tax-free input. However, there are some problems that may cancel that out. It impacts on the cash flow of agricultural businesses because they have to put all of the tax out. They can claim it back on a monthly basis, yes, but it is going to be two months before they are able to recover that. So that means, in some cases, that they will have to basically invest $4,000 to $5,000 in tax and they will have that invested all the time. We have made representation, both to the Department of Finance here and to federal officials. I think I have one copy of our position on that particular issue with me and I can leave it here, if you like. Basically, it has a positive impact on agriculture and it will have a positive impact on the cost of food and I think that in the long run it will probably help keep the cost of food lower, although you may not notice that in your weekly grocery bill.
MS. O'CONNELL: The marginal operator would be hard put to invest in tax?
MR. NASON: Well, the way it works now is that major farm inputs are zero rated, tractors above a certain horsepower and expensive equipment, so there is no tax at point of sale on those particular items now. Farmers pay the GST on all their other farm inputs where it is applicable and claim it back. So what is going to happen after April 1st, and they were only paying 7 per cent GST, farmers are exempt at point of sale from a large number of farm inputs with regard to provincial sales tax. After April 1st, they will have to pay 15 per cent at the point of sale for farm inputs but they will be able to claim that all back. It expands the base of tax-free farm inputs to things like truck parts. Farms now are shifting, in a lot of cases, from tractors to the use of trucks and now they are paying the tax on them. They won't in the future. Electricity and those types of inputs, they will be able to claim that back. However, they will have to finance those inputs for a period of two months. So it has an impact on their cash flow.
Again, in some beef operations, that impact may be - coupled with all the other things that have happened - enough to drive them out of business.
MR. MCINNES: I was going to ask another couple of questions. You did talk about the beef producers and I know they are having a very difficult time. The price of cattle is lower than it has been in what, 30 years. How many years would you say?
MR. VAN OOSTRUM: Twenty.
MR. MCINNES: Twenty years, ridiculous. But anyway, our Agriculture Critic, George Archibald - who is sick today by the way, or he would have been here - suggested to the Minister of Agriculture that maybe the Farm Loan Board could deal with the beef producers who have loans with them to see if they could extend or delay the payments for a period of time. I wonder if that was done.
MR. NASON: Yes, I think the Farm Loan Board, to my knowledge, has been using the flexibility that they have to deal with beef producers.
MR. KEITH COLWELL: I just have a couple of quick questions. I am very concerned, as you are, about the loss of agricultural land. When I hear that towns like Wolfville are going to build a shopping centre where a farm is, I think that is unacceptable. How much is this happening? How much land are you losing a year to this sort of thing? What percentage of the provincial farm land? Do you have any idea?
MR. VAN OOSTRUM: If I look around where I come from, I live on Highway 221, alongside the mountain from Lakeville all the way, you probably know where it is, right behind my farm is the slope of the mountain and between me and Berwick, and the Berwick interchange, is only about a mile and one-half. In the last year, there were four blocks of land sold to people from the city. They are giving them $1,000 to $1,500 an acre. That doesn't mean much if you have to build in Halifax and you pay let's say $25,000 or $30,000 for the building lot, you may as well go to the country. In Kings County we have a law, you cannot build unless you get 20 acres but what they do, they are buying 40 acres and 50 acres in that little stretch where I live. That is 200 acres in years that are going to be grown up in bushes.
We don't make agricultural land anymore. I don't know how you are going to protect it. There must be a way you can do it. I think the other thing is people probably in this part of the world have been hungry. The part where I came from, I am not that old but I still remember that times were tough. They were hungry. But here we don't have it. I think if we want to protect agricultural land, if you can put a tax on one day, I think there should be a way to take it off the next day too. Unless there is a willingness from the government to work together with us, we are not going to come nowhere. There has to be that willingness and there has to be the cooperation.
Mr. McInnes hit it right on. There used to be cooperation. There used to be a way we could sit down and talk with the government but that is gone now. If we look like last week, if Mr. Savage - we had a meeting last Tuesday in Halifax - and he said the land tax was a mistake, he admitted it himself, I was shocked by that. Anyway, I leave it to you.
MR. NASON: When we talk about what is happening with land in Nova Scotia, I use woodlots in Inverness County as an example because it is easy for me to understand so I assume it is easy for everybody to understand. One of the things that is happening in Inverness County is that a lot of the wood land has been sold to out-of-province landowners, people from European countries because they can buy 200 acres or 300 acres of land for less than they can buy a square foot of land there. They buy that land and it effectively goes out of use. That is starting to impact on the forestry industry and people's livelihoods in that area because they effectively have that land tied up. They are not interested in cutting the timber on it. They are not interested in cutting the pulp and doing silviculture, they just want to own it. It ties that up and has an impact on that rural community.
The same type of thing has started to happen, in fact, with agricultural land in some places in Nova Scotia and that will continue; the case of a beef producer. What does he do if nobody is even recognizing the fact that that is a valuable resource. He is going to be forced to sell it to the highest bidder and the highest bidder isn't going to be agriculture.
MR. COLWELL: What about the problem with the municipalities? They have more control over zonings and what the land can be used for. How can that be addressed with the municipalities individually? I have heard several times in your conversation you are quite concerned about how the municipalities in general work with the - or lack of work - farming industry.
MR. NASON: Well, I think your chairman would probably agree with me. Municipalities look at land as revenue. It is real property. It is something you can tax. The highest value returns the highest tax so naturally the Town of Wolfville would look at the marsh that is within their town boundaries as being a better resource for their tax system with a shopping centre on it than it is left in agriculture land. There is tax revenue there for them. I was involved in local government, that is how I viewed land.
The problem is that basically what is being done now here is that there has been an expressed interest by both levels of government. Sure this land should be protected but what people are saying is that the farmers should be the ones who should absorb the cost of protection and that is what preferential tax treatment does, it compensates the owner of that agricultural land to some extent for keeping that land in agricultural production. There are some jurisdictions in the U.S. where states have floated a bond issue and bought the development rights to agricultural land to protect that land for the future. They float a bond issue and use the money to pay the owners of agricultural land for their development rights so that land use cannot be changed. They have compensated the landowner for it.
I don't think farmers in this province can be left, it is the same as the endangered species legislation. It is a case where rural landowners are being asked to absorb the full cost of protecting endangered species. Rural landowners or agricultural landowners should not be forced to absorb the full cost of protecting agricultural land and if you ask municipalities to do it, what they will do is zone it for agriculture which means it loses its value for development so the farmer, basically, loses equity. In some cases, it is that equity that allows him to go to the bank and borrow operating capital to get through a few bad years. It is a complex problem. There are no easy solutions but a place to start, it was started in 1978 and last year that small start was thrown out.
[2:00 p.m.]
MR. MCINNES: They are not making any more land.
MR. BRUCE HOLLAND: I don't know if this pertinent, Mr. Chairman. I will let you be the judge. It probably shows my ignorance but why are beef prices down so low?
MR. VAN OOSTRUM: I think the main thing is that beef had gone up to get its high peaks and get the low ones again but this time the low end is low, low, low.
MR. HOLLAND: Is it because there is a lot on the market?
MR. VAN OOSTRUM: There is a lot on the market but it usually levelled out. The last couple of weeks it seems to level out a little but nobody can predict the future. The other thing is that really beef in Nova Scotia shouldn't be as low but we are allowed to bring beef in. Somebody was in Canning in the store the other day and there was boxed beef in from Kansas. It is ridiculous. Let's be honest. I know we are getting beef in from Ontario and from out West but why do we have to let boxed beef come in from Kansas. I don't know if I answered your question.
MR. HOLLAND: Well, is the industry itself expanding in Nova Scotia?
MR. VAN OOSTRUM: It could be expanding. We bring in, I think I did rough figures, I think we bring in, in Nova Scotia, about $30 million worth of beef a year and we are having a hard time to sell our own because the major chain stores, it is easier for them to order let's say two or three railway cars of beef and they say, oh we can't bother with that one store in New Minas, you support. You give beef on there. We get some government-inspected plants in the Valley and all through the province but you still don't seem to get through to those bigger chain stores to move the beef.
MR. KENNETH MACASKILL: Along the same line, we don't see the price down on the shelves in the supermarkets, so if the price of beef is low, who is making the money?
MR. VAN OOSTRUM: That is a good question. I don't like to commit on that because I know one of our former presidents did comment on that about a year ago and he got a real dirty letter from one of the big beef outfits out West. Isn't that right, Laurence? (Interruptions)
MR. NASON: Yes. It is a real complex situation. There are some real advantages to raising beef in Nova Scotia. There is a 70 per cent deficiency. We bring in about 70 per cent of the beef we eat but there are a whole lot of things in between that need to be carefully put together and we don't even know what they are. We don't know how to describe them. So one of the things the federation is in the process of doing right now is in conjunction with P.E.I. and New Brunswick, we are going to try to examine some of the issues and try to find out, so we can have some empirical evidence when we have to talk to you people again, try to find out the relationship between the rural economy and the beef sector and the agricultural economy and the beef sector. We need to answer some of those questions.
MR. MACASKILL: Is it a government problem, federal or provincial?
MR. NASON: Everything is a government problem. I think it is a combination of things. Anthony might want to comment, too. For the past 20 years, and I was in the beef business, that is what I did and it was fairly good to me. I have three girls, moved out, through college and married off without any problems and I was able to keep them halfway nicely dressed and so on and fed but it is a tough industry and for the past 20 years there has been a fair number of dollars thrown at it and I say thrown at it because that is basically what has happened.
At one point, somebody in Nova Scotia decided there was going to be a viable hog industry here and there was some money invested into it and today we have the best hogs in North America and we have productive hog farms and they are doing well and they are keeping themselves afloat. That was because somebody decided to make a planned investment in that industry and that has never been done in the beef sector and it is not the government's fault entirely because I am sure Mr. McInnes would know that you cannot deal with a beef producer. They just don't want to be organized. You might want to comment on that, Anthony.
MR. VAN OOSTRUM: I think you said it all, Laurence.
Another thing I would like to bring up for a minute is on government programs, crop insurance. We have the best crop insurance in Canada and if you ask any farmer who ensures his crops, he will admit it. I think the federation was quite disturbed when it heard that crop insurance was from now on under government, too. Laurence probably can explain it a little better. The first thing we asked about it last week and they say yes, we are moving them out of the Prince Street office, we are moving them to the college, to the library building there and it will save us the rent of this building. The feeling I get now from fruit growers and
livestock producers, because you can insure livestock too, is that as soon as it moves away, they don't see it as their own program any more. They think it is going to be taken under government wings. I can assure you, the people who take in their insurance, if we keep on going like this way, they will get out of it because they see it as a government, it was our own. We built it up over I think 28 years or 30 years and they don't like to see the government getting their hands on it. It was an excellent program.
MR. NASON: It has been a kind of quasi-government mom and pop storefront operation run by the farmers for the farmers. They can go in and have a chat with the staff. If they lose a crop, they can get a cheque within a week and once it becomes part of the delivery system of the Department of Agriculture, I would presume it would take a couple of months to get a cheque. There will be a layer of administrators and so on and so on.
MR. CHAIRMAN: Could I ask for clarification of this issue? Have you indicated, what we are talking about now is just a physical move of the existing staff to a new location and not really a change in the operation?
MR. NASON: They are going to move the bank account as well.
MR. CHAIRMAN: To where?
MR. NASON: I assume it will become part of wherever bank accounts disappear to in the government process. It will become part of a group that include the Farm Loan Board, crop insurance, program deliveries. I assume the bank account will just become part of the Department of Finance and cheques will be issued there. I am sorry I don't have enough knowledge of how government operates to know where it will go, to a black hole.
MR. CHAIRMAN: I am just trying to get a clarification. What I am trying to understand, I don't know if anyone else . . . .
MR. HOLLAND: I have the same problem, Mr. Chairman, you said it was a mom and pop, it is a federation or farm . . .
MR. NASON: No, it is a quasi-government organization. In Great Britain, they called in quango.
MR. HOLLAND: What is the company called?
MR. VAN OOSTRUM: Nova Scotia Crop Insurance Commission.
MR. CHAIRMAN: My difficulty I am going to expressing in very layman's terms and maybe, from what I have heard so far, I am trying to understand your concerns but you are saying that basically we have taken a quasi-government operation and moved it to another
physical site. It is still a quasi-government operation but you have a concern it will become a . . .
MS. O'CONNELL: Not if they are rolling into the Department of Agriculture.
MR. NASON: I think it gets rolled in. Now the administrator reports to a board. He will be reporting not only to the board in the future but to an administrative layer in the Department of Agriculture. The bank account which is now controlled by the commission will be rolled into the black hole that I referred to. It will go into the government system and the cheques will be requisitioned, I suppose, by some staff person and so on. The Farm Loan Board, a few years ago we could identify what was happening there. Now it has been rolled into the Department of Finance and the director of the board cannot even get the information about the interest differentials and so on.
MR. CHAIRMAN: I think Mr. Casey had a question next.
MR. JOSEPH CASEY: I am not much of a farmer, as you know, but I have some small farmers, beef farmers and so on, in my constituency and they have a good market with their neighbours and so on selling beef. Apparently they have to take the cattle to an abattoir, do they, to have them executed? Do they have to go to that now?
MR. VAN OOSTRUM: Only if they are selling to a third party.
MR. CASEY: If you sell them to somebody who is not necessarily your next door neighbour, I guess, is that it?
MR. VAN OOSTRUM: Then you are still all right.
MR. NASON: Direct sales don't have to be inspected.
MR. CASEY: It doesn't have to be but they have problems taking them into a place that would be acceptable to everybody. Would it be possible to set up a small abattoir - am I using the right term? - set up a small one in different areas and they take their cattle there and have them butchered and then sell it to their neighbours in a bigger quantity. You know what I mean, they get a retail price for their meat that way. Does that make sense?
MR. VAN OOSTRUM: Yes, they have set up some of those smaller slaughterhouses like Bowlby in Kingston is one, Mike Oulton here in Windsor is one. There are one or two around Truro, smaller slaughterhouses.
MR. CASEY: So that is happening?
MR. VAN OOSTRUM: Yes, it is happening.
MR. CASEY: In our area there are 60 fish plants that are closed down, all with stainless steel equipment and so on. They could be packaged in any one of these and sold and then they could sell them to their neighbours at a retail price rather than the wholesale price.
MR. VAN OOSTRUM: The only thing, if you go to a third party, I can kill one at home and cut them and wrap them. I would sell it to Laurence and then it doesn't need the government inspection but as soon as I go and sell them to a store, then I would be in trouble. I have to get them inspected and graded. You don't have to have them graded but you have to have them inspected when you go to a third party.
MR. CASEY: We have one other problem which is arising. People are starting to raise emus, if I am saying that correctly, and we are getting birds all over the place and they can't get anybody to kill and package them. Do you have any solutions for that?
MR. NASON: Prince Edward Island is the closest place. There is a plant in P.E.I. that handles them. As I understand it, it is a difficult process, slaughtering ratites, or emus and so on.
MR. CASEY: You have to cut them properly and package them.
MR. NASON: Yes.
MR. CASEY: It is a shame because they are growing fast and they do have markets but they have to get over this packaging problem.
MR. NASON: And they have to find a market for a 100 pound chicken leg.
MR. CASEY: Yes, that is right. You can imagine going into a store and ordering chicken wings. You are talking about the price of beef being low now. I have been kicking around a long time but I was talking to one of my old fishermen not too long ago. He went across from Victoria Beach to Digby by boat to do his shopping. He walked a quarter of a mile up town and bought a soup bone for 15 cents and he had to sit down five times to rest on the way back to the boat, all for 15 cents. So beef has been low at times, I can see that.
MR. CLIFFORD HUSKILSON: Going back to where we were talking about the bank account before, I am just wondering where the money originally came from? Does that come from the farmers?
MR. NASON: The crop insurance?
MR. HUSKILSON: Yes.
MR. NASON: It comes from a number of sources. The farmers pay premiums and there is also a federal government program that provides funding for that function, for crop insurance, through what they call Safety Net Program.
MR. HUSKILSON: What percentage would the farmers put in themselves, roughly?
MR. NASON: I should know that but I am sorry, I don't. We can send you that information, if you would like. (Interruptions)
MR. VAN OOSTRUM: I think it is one-third government, one-third provincial and one-third farmers.
MR. HUSKILSON: So it is one-third, one-third, one-third?
MR. NASON: Yes.
MR. VAN OOSTRUM: I have to go back a little bit to my apples, if you don't mind. Like my apple industry, I think I only, in 28 years took two claims out. The first year I started farming I did have a claim because we did have a frost in the blossom time that killed pretty well all the blossoms. I always think about that year I really needed it and it has been a success. I think this year, the crop insurance, because they have quite a bit of money in the bank, they say, okay, we are going to reduce the rate by 0.5 per cent. That is a lot of money and it has been an excellent program.
MR. CHAIRMAN: Are there any further questions? Gentlemen, if you would like to sum up. First of all, on behalf of the committee, I want to thank you for bringing forward your concerns and at this time I provide you an opportunity if you wish to sum up.
MR. NASON: Well, I guess by way of summary we would just like to thank you for the opportunity. As I said when we started, we think this kind of forum is important. We don't get to talk to the people around this table very often so you are a group of political decision makers that we welcome the opportunity to discuss these issues with and if, at any time, your committee needs information on the agricultural industry, by all means we can try and provide it.
MR. CHAIRMAN: We have a couple of other agenda items, gentlemen, just to deal with future witnesses. You are free to leave now if you wish, or if you want to stay, but again on behalf of the committee, I would like to thank you for coming.
We are going to circulate the lists that we received today from the three caucuses and try to determine a future direction.
[The committee recessed at 2:15 p.m.]
[The committee reconvened at 2:18 p.m.]
MR. CHAIRMAN: Shall we reconvene and review this particular list that we have here? Traditionally, in the past, we have met either bi-monthly or monthly and we have tried to facilitate as many of the presenters as we could. Sometimes they are not able to come in at the particular time we set a meeting so there has been some latitude in the past that we would try to identify two or three presenters and see if we could coordinate them at the same time as the committee.
We have before us three lists and some of them have common themes. You should have the list from each of the caucuses before you. As Chairman, I can only suggest so I thought where we started this session with an agriculture theme, and with all the activities that are happening at the Agricultural College, if you would like for one of our meetings, to have the meeting at AC with a detailed tour so we, as a committee, would know what is being done on the education side, the research side and so on - and I am suggesting we should do that before the end of the month if we are going to travel, and it is really not a great deal of travel. I am speaking out loud here and I am asking for input. If we were to go there, for example, at 10:00 a.m., say a month from now, and work through until about 2:00 p.m. I have done a tour of AC before. I do not think you can do justice to that facility in any less time, and also to provide an opportunity for the committee to meet with the staff there or the administration to bring us up-to-date as to what is happening even with the most recent announcement at AC this week for increased enhanced research. If I can be so bold as to suggest a date and that you check your calendars, if you would like to do that next. I see that as probably the only out-of-the-city trip before the House sits, and I do not have a magic date but I am hoping that we can do it during the month of March. We have March break coming up fairly soon which will affect some of you one way or another.
What I tentatively looked at, if you agree we can do one of two things. If this date does not work for committee members, or with the college we could plan a regular meeting here. What I am going to suggest is March 25th. That would mean that we would meet roughly one month from today, a Tuesday like we are now and it does not seem to conflict. We would have to let Human Resources know because I think some of you serve on both. Assuming that we are not sitting, if we were sitting that would change our schedule.
MR. MCINNES: They have to give us 30 days and we do not have that yet. So, we are safe.
MR. CHAIRMAN: So I think we are safe for March 25th. Now, I will ask, what is the feeling of the committee? I have been there before and I know it is exceptional and where we start with agriculture, that is the link that I thought would be appropriate. If the committee
wishes, we can have Darlene contact the college and see if they can facilitate a tour of this committee at that time.
MR. MCINNES: It is a great facility. I mean for me it is halfway from here to home so I would love to go. I think it is great for you all to see it really. It is a great facility.
MR. CHAIRMAN: Now, we may never get a date that is going to accommodate everyone. That is the big problem we have when we try to do these things.
MS. O'CONNELL: Can I just raise a concern? I would love to go and see it myself. I am just wondering, if we meet say six times a year, and I do not know what the running score is, would we want to go on to another pressing issue and come back to that, or not? I mean I keep thinking about forestry.
MR. CHAIRMAN: There is nothing to prevent us. That is another discussion that we can have after this. Basically, we went through a series before, I think eight or nine monthly meetings, and I think we spent a lot of time on the fishery. Now, we have identified what is our theme. Even when the House is sitting, we usually meet in the morning. There is nothing to prevent us if we have sufficient interest or topics to meet more than once a month.
MS. O'CONNELL: I guess what I am really saying is that, yes, I think it is a great idea and I would love to do it but I hope that before the summer comes, the committee would spend some time on forestry in addition to this.
MR. CHAIRMAN: We have in the past so I do not think it would be a change from the agenda schedule. So, if that is the consensus, I think what we can do is identify two things, attempt to work something for March 25th. Failing that, then we would have a committee meeting here to deal with one of the other agenda topics that have been circulated. Would that give us some flexibility?
SOME HON. MEMBERS: Agreed.
MR. CHAIRMAN: So, I do not think we need that in the form of a motion. We have been fairly flexible in dealing with those items in the past. That is number one. Number two, what I could do for a backup is, taking the list that you have supplied, I think what Darlene and I have done in the past is contacted a couple of names on the list in case, for example, today we may not have been able to get the Federation of Agriculture in, but we will attempt to work our way through these lists (Interruption)
MS. O'CONNELL: I was just looking for overlap on the list.
MR. HOLLAND: Seafood Producers Association appears on both lists and the Forest Group Venture Association appears on both lists, I am sorry on two of the three.
MR. CHAIRMAN: So, what we could agree then is we could identify maybe three and if we cannot meet in Truro on March 25th, we will try to get one of those groups in. Then at the next meeting agree what our priorities would be? That gives us a little flexibility.
MR. MCINNES: You have to have flexibility.
MR. CHAIRMAN: So, I think we have agreement that we will try for the Seafood Producers Association either this or the subsequent meeting, and what was the other one?
MS. O'CONNELL: Forest Group Venture.
MR. CHAIRMAN: Forest Group Venture, so I think that would give us enough to start from plus the tour if it can be coordinated. Is that agreeable with the committee members?
SOME HON. MEMBERS: Agreed.
MR. CHAIRMAN: Okay. Then if there is any further discussion of presenters I think we can deal with them at each subsequent meeting and we will work our way through the list as we have done in the past. If that is an agreement, then a motion, unless there is any other new business. So, as to the frequency of meetings, I think what we will do is we will be flexible. I think we could agree right now, minimum of one a month, and if we can facilitate, I think we used to go to a maximum of bi-weekly or two a month. Would that be agreeable, just for a consensus. We don't have to vote on it or anything.
MR. COLWELL: That sounds agreeable.
MR. MCINNES: That is fine. When the House is in session, in the mornings we can have a meeting with no problem.
MR. CHAIRMAN: So, if that is agreeable, a motion to adjourn and we will notify you once we have been able to facilitate the next meeting.
MR. HUSKILSON: So moved.
MR. CHAIRMAN: We stand adjourned.
[The committee adjourned at 2:26 p.m.]
