RESTRICTEDWORLD TRADE
ORGANIZATIONG/SCM/Q2/CAN/14
5 November 1999
(99-4790)
Committee on Subsidies
and Countervailing MeasuresOriginal:  English
SUBSIDIES
Replies to Questions posed by the UNITED STATES1
Regarding the New and Full Notification of CANADA2
The following communication, dated 1 November 1999, has been received from the
Permanent Mission of Canada.
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Q1. Would Canada please explain why the fo llowing programmes were not included in its
notification?  In addition, should you determ ine that any of these programmes ought to have
been notified, please provide the full name of the subsidy, the enabling legi slation, the reason for
the subsidy, to whom the subsidy is granted, th e amount of the subsidy, and the trade effects of
the subsidy.
Reply
The Federal Government has been engaged in on-going consultations with Canadian
provincial governments regarding notification requ irements under Article XVI:1 of the GATT 1994
and Article 25 of the Agreement on Subsidies and Countervailing Measures.  Thus far, the provinces
have not advised the Federal Government of any programmes that meet the criteria for the purposes of
notification.
Regarding the provincial government assistance measures identified by the United States in
WTO document G/SCM/Q2/CAN/12, the Canadian Federal Government has discussed these with the
relevant provincial governments and is submitting to the Committee the following information for
purposes of transparency.
• Agricultural Products Board Programme
Q2. This programme provides price stabilization of named and designated agricultural
commodities, including cattle; hogs; lambs and wool; industrial milk and cream; corn and
soybeans; and spring wheat, winter wheat, oats and barley not produced in the designated area
as defined by the Canadian Wheat Board.
                                                     
1 G/SCM/Q2/CAN/12
2 G/SCM/N/38/CANG/SCM/Q2/CAN/14
Page 2
Reply
This programme ended in 1993 and there have not been any payments since then.  The
legislation was formally rescinded in 1998.
• Alberta Crown Lands Basic Grazing Programme
Q3. This programme grants grazing rights on public land.
Reply
This programme helps put land that is of marginal  agricultural quality into multiple uses on a
sustainable basis with careful government oversight.  The programme includes a wide variety ofapplications, including protection of watershed, resource conservation, provision of wildlife
protection and grazing habitat, trapping, hiking , oil and gas exploration, and livestock grazing.
• Alberta Crow Benefit Offset Programme
Q4. This programme compensates producers and users of feed grain for market distortions
in feed grain prices.  It was created by the fed eral government’s policy on grain transportation.
Reply
This programme was terminated on 31 March 1994.  While there have been some residual
expenditures after termination due to commitments made under the programme, no assistance has
been provided after 17 May 1996.
• Alberta Feeder Association Guarantee Programme
Q5. This loan guarantee programme was established in 1938 to encourage banks to lend to
cattle producers.
Reply
The Province of Alberta has not paid out on any guarantees for at least 17 years.
The purpose of this programme dates back to 1938.  It was to encourage the banks to loan to
what, at the time, were new feeder associations.  The programme provides for a loan guarantee for
one year covering up to 15 per cent of the authorized line of credit.  It is up to  each feeder association
to arrange for a revolving line of credit from a commer cial lender to provide for short-term loans to its
members to finance the purchase of cattle.  The provincial government and the bank enter into a
guarantee agreement after the association has ne gotiated the loan rates, credit limit and security
requirements for the loan.  The guarantee provides a very limited assurance to the bank concerning
repayment, and thus is of limited commercial value.
• Manitoba Cattle Feeder Associations Loan Guarantee Programme
Q6. This programme was established in 1991 Q6.to assist in the diversification of Manitoba
farm operations.  The programme guarantees loans for the acquisition of livestock by feeder
associations.G/SCM/Q2/CAN/14
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Reply
This programme was introduced by the Province of Manitoba to assist in the diversification of
Manitoba farm operations.  The Province of Ma nitoba through Manitoba Agricultural Credit
Corporation provides a 25 per cent partial loan guarantee for renewable 2 year terms to the lender inrespect to the repayment of loans made to feeder associations to finance the acquisition of livestock
by the members of those feeder associations.  The guarantee, while a part of the security, provides a
very limited assurance to the bank concerning repayment, and thus is of limited commercial value.
• Manitoba Crown Lands Programme
Q.7 This programme grants cultivation and grazing leases.
Reply
The purpose of this programme is to effectivel y administer the disposition of Crown lands
identified for agricultural production and to improve productivity of these lands through improved
management techniques.  Crown lands are generally located in the marginal land areas of theProvince.  They are used in a variety of ways that include wildlife hunting and forestry hikers, as well
as being made available to farmers through forage (grazing) and cropping (cultivation) leases.
• New Brunswick Livestock Incentives Programme
Q8. Under this programme, loan guarantees were provided to livestock producers for
purchases of breeding stock and for feeding and finishing livestock for slaughter.
Reply
This programme was established to provide loan guarantees to livestock producers purchasing
cattle, sheep, swine, foxes and mink for breeding purposes, and for feeding and finishing livestock for
slaughter.  The Government of New Brunswick guarantees loans that are granted by commercial
banks using their own commercial criteria.  The guarantee, while a part of the security, provides a
very limited assurance to the bank concerning repayment, and thus is of limited commercial value.
The amount of the guarantees varies by loan, while the time-period of the loan can range from one toseven years.  The maximum interest rate under this programme is the commercial prime rate plus
1 per cent.
• New Brunswick Swine Assistance Policy on Boars
Q9. Under this programme, grants are provided to producers for purchases of boars to
encourage production of breeding stock.
Reply
This programme terminated 31 March 1996, and no expenditures were made after that date.G/SCM/Q2/CAN/14
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• New Brunswick Swine Industry Financial Restructuring and Agricultural Development
Act (Swine Assistance Programme)
Q.10 This programme provides interest subsidies on medium-term loans to hog producers.
Reply
This programme operates as a debt deferral mechanism to offset the unpredictability brought
about by price fluctuations for hogs.  A portion of the producers' debt is set aside in an account by the
New Brunswick Department of Agriculture & Rural De velopment.  Once hog prices increase and the
producers' financial situation improves, producers repay the amount set aside in their account.  There
were no loans written off as being in default under this programme.  There were no expenditures
under this programme in fiscal year 1997-98.
• Newfoundland Farm Products Corporation Hog Price Support Programme/
Newfoundland Hog Price Stabilization Programme
Q11. During fiscal year 1984, a price stabili zation programme provided pork producers
interest - free loans from the provincial government equal to the difference between astabilization price based on the cost of producti on and the market price for hogs.  However, that
programme was terminated and in April 1985 the provincial government set up a new price
support programme whereby hog producers receive a certain amount per pound on all market
hogs regardless of the prevailing market price.
Reply
This programme terminated on 18 March 1993.
• Newfoundland Weanling Bonus Incentive Programme
Q12. Under this programme, a payment is provid ed for each weanling produced by farmers
engaged in swine production.
Reply
This programme terminated on 31 March 1993.
• Nova Scotia Improved Sire Programme
Q13. This programme provides grants to pu rebred and commercial swine producers for the
purchase of boars.
No information provided.
• Nova Scotia Swine Herd Health Policy
Q14. This programme reimburses veterinarians for house calls.
No information provided.G/SCM/Q2/CAN/14
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• Ontario Bear Damage to Livestock Programme
Q15. This programme provides compensation fo r the destruction of, or injury to, certain
types of livestock by bears.
Reply
The purpose of this programme is to provide compensation for livestock or poultry killed or
injured by bears.  This includes cattle, goats, horses, sheep, swine and poultry.  The maximum
compensation offered per head is $1,000.  In 1997-1998, $4,210 was paid out under this programme,
an amount that would have no impact on production or trade.
• Ontario Feeder Cattle Loan Guarantee Programme
Q16. This programme, established in 1990 to assist cattle producers, provides start up grants
to new feeder associations.  It also provides guarantees on loans for the purchase and sale of
cattle.
Reply
The purpose of this programme is to assist cattle producers by guaranteeing a portion of loans
made to feeder cattle finance cooperatives to purchase cattle for feeding.  All reasonable steps must be
taken to recover the debt prior to the guarantee being claimed.  The guarantee is limited to a
maximum of 25 per cent of the principal and interest on an eligible loan.  The guarantee, while a partof the security, provides a very limited assurance to the bank concerning repayment, and thus is of
limited commercial value.
• Ontario (Northern) Heritage Fund Agriculture Assistance
Q17. This programme, established in 1988, funds infrastructure improvements and
development opportunities through forgivable performance loans, incentive term loans, and
loan guarantees to promote and stimulate economic development in Northern Ontario.
Reply
The purpose of this programme is to promote and stimulate economic development initiatives
in northern Ontario.  Greater collaboration among industry participants has been encouraged by
focusing on funding infrastructure improvements and development opportunities in northern Ontario.
Types of assistance available include conditional contributions, forgivable performance loans,
incentive term loans and loan guarantees.  For the 1997 calendar year, the total value of all loan
forgiveness programmes was $1,485,735.  There is a cap of $50,000 in assistance per project partner.
• Ontario Livestock and Honeybee Compensation Programme
Q18. This programme compensates livestock producers whose animals are killed by wolves
and coyotes.
Reply
The purpose of this programme is to provide a compensation to livestock producers whose
animals are injured or killed by wolves or coyotes.  A farmer whose livestock are attacked informs the
local municipality within two days of an occurrence.  The municipality sends an appraiser to the farmG/SCM/Q2/CAN/14
Page 6
to determine whether the damage was caused by wolves, coyotes or dogs and to assess the amount of
damage.  Reimbursement is made only for damage caused by a wolf or coyote.  The programme also
covers honeybee damage by bears.  The total dollar expenditure under this programme in 1997-1998
was $722,025.
• Ontario Rabies Indemnification Programme
Q19. This programme compensates producers for rabies damage to livestock.
Reply
The purpose of this programme is to encourage farmers to report cases of rabies in livestock
by compensating them for losses of livestock that ha ve died as a result of rabies.  Types of livestock
covered include cattle, goats, horses, sheep and sw ine.  The total expenditures under this programme
in 1997-1998 were $13,882 (of this amount, the provincial contribution was $8,329).
• Ontario Swine Sales Assistance Policy
Q20. This programme is designed to promote the distribution within Ontario of pure-bred
animals of superior quality by providing grants to assist in defraying the costs of conducting
consignment sales.
Reply
The programme is designed to assist breeders' clubs to conduct swine consignment sales for
the purposes of distributing purebred breeding stock of high quality in Ontario.  The association is
granted $2.50 per animal sold at the sale to a maximum of $100 per sale.  This programme was
terminated on 30 September 1998.  Expenditures under this programme in 1997-1998 amounted to $1.
• Quebec - Article 7 Grants from the Quebec Industrial Development Corporation
Q21. This programme provides assistance in the form of loans, loan guarantees, grants, and
assumptions of costs associated wi th loans, and equity investment for projects capable of having
a major economic impact.
Reply
This programme, which is a broadly-based industrial development programme, provides
interest bearing or interest-free loans, preferred equity capital, and loan guarantees.  In 1997-1998, the
total expenditures under this programme amounted to $68.5 million.
• Quebec Farm Income Stabilization Programme for Hogs (FISI)
Q22. This programme guarantees a positive net annual income to enrollees.
Reply
This is part of the Quebec Farm Income Stabilization Insurance Programme described below.G/SCM/Q2/CAN/14
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• Quebec Farm Income Stabilization Insurance Programme
Q23. Schemes under this programme guarantee a positive net annual income to participants
when  their income falls below the stabilized net annual income.
Reply
This programme stabilizes the farm income of agricultural producers in Quebec.  it is
generally available to the agriculture sector.  Payments are triggered when the average selling price is
lower than the stabilized income level.  The stabi lized income level is based on the cost of production,
plus 70 to 90 per cent of the skilled worker's salary.  Total expenditures under this programme for
1997-1998 amounted to $168,349,800.
• Saskatchewan Breeder Associations Loan Guarantee Programme
Q24. This programme, established in 1991 to facilitate the establishment of cattle breeder
associations, provides loan guarantees for the purchase of breeding cattle.
Reply
This programme was established to facilitate the establishment of cattle breeder associations.
Individual associations negotiate with private lenders to borrow funds to purchase breeding females.
The Government will provide the lenders with a loan guarantee if requirements are met.  This
guarantee is 25 per cent of the amount outstanding on the loan at the time of default.  Because cattlefarmers in Saskatchewan have a relatively high level of diversification and commercial banks or
private lenders in the province typically consider such mixed operations to be a lower risk than more
specialized operations, the loan guarantee is of limited commercial value.
• Saskatchewan Feeder Associations Loan Guarantee Programme
Q25. This programme, established in 1984 to facilitate the establishment of feeder
associations, provides loan guarantees for the purchase of feeder heifers and steers.
Reply
This programme was established to facilitate the establishment of cattle feeder associations.
Individual associations negotiate with private lenders to borrow funds to purchase feeder heifers and
steers.  The Government will provide the lender with a loan guarantee if requirements are met.  This
guarantee is 25 per cent of the amount outstanding on the loan at the time of default.  Because cattle
farmers in Saskatchewan have a relatively high level of diversification and commercial banks or
private lenders in the province typically consider such mixed operations to be a lower risk than more
specialized operations, the loan guarantee is of limited commercial value.
• Saskatchewan Livestock and Horticulture Facilities Incentives Programme
Q26. This programme promotes diversification of the rural economy by encouraging
investment in livestock and horticultural facilities.  It provides rebates of education and health
taxes paid on building materials and stationery equipment used in livestock and horticulturaloperations.G/SCM/Q2/CAN/14
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Reply
This programme applies to Saskatchewan residents who are constructing and equipping
facilities for horticultural or livestock production.  Most agricultural inputs to production have not
been subject to provincial sales tax.  Construction materials and some specialized equipment havebeen taxed, initially because of the difficulty of determining their agricultural use from non-
agricultural use.  Intensive livestock operations were discriminated against because construction
materials and specialized equipment are a large part of the expenditure of establishing an enterprise
compared to a  crop or cattle breeding operation.  The programme is intended to put livestock
operations on the same footing as other agricultural operations and applies to purchases of eligible
equipment or materials after 31 December 1997 and before 1 January 2001.  Expenditures in 1997-
1998 were $11,946.
• Saskatchewan Pasture Programme
Q27. This programme provides grazing rights and breeding and health services for fees based
on the recovery of costs.
Reply
The Saskatchewan Pasture Programme was designed to provide supplemental grazing on
public lands to Saskatchewan livestock producers and maintain grazing and other fragile lands in
permanent cover to promote soil stability.  Saskat chewan Agriculture and Food operates 56 provincial
community pastures and offers grazing, breeding and health services for fees at rates based upon
recovery of costs associated with the grazing and breeding services of each pasture.  Pasture fee
revenues exceeded expenditures in 1997-98.
• Technology Innovation Programme Under the Agri-Food Agreement
Q28. This programme provides grants to produ cers within a designated geographical region
of Canada for technology innovation.
Reply
The Technology Innovation Programme is one of the three components of the Canada-
Quebec Subsidiary Agreement on Agri-Food Development.  The Agreement aims to enhance and
diversify scientific and technological knowledge, speed up technology transfer and stimulate
cooperation among agri-food industry stakeholders.  There are three components under the Agreement
– Research, Technology Innovation and Support for Strategic Alliances.  The objective of the
Research component is to enhance and diversify scientific and technological knowledge in the areas
of food production, processing, storage and marketing, while bringing researchers and the industrycloser together.  The Technology Innovation component is designed to accelerate the adoption and
dissemination of innovative production technologies and systems.  The third component, Support for
Strategic alliances, aims to stimulate cooperati on among stakeholders in the agri-food industry sub-
group through strategic activities designed to  improve competitiveness.  The programme is generally
available to the agriculture sector.
Expenditures under the technological innovation component were $1,134,700 in 1997-98.
Expenditures under the research component were $4,132,000 in 1997-98.G/SCM/Q2/CAN/14
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Expenditures under the support for strategic alliances component were $560,532 in 1997-98.
All three components of the programme terminated 31 March 1998.
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