AGRI Committee Meeting

STANDING COMMITTEE ON AGRICULTURE AND AGRI-FOOD

COMITÉ PERMANENT DE L'AGRICULTURE ET DE L'AGROALIMENTAIRE

EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, April 3, 2001

• 0904

[English]

The Chair (Mr. Charles Hubbard (Miramichi, Lib.)): I think we'll start our meeting again. Pursuant to Standing Order 108(2), we're meeting this morning with representatives of the Canadian Wheat Board concerning the marketing of wheat and barley.

• 0905

It was my understanding this morning when we organized the meeting that you gentlemen were available for about one hour and that you had other items on your agenda. Probably we could just set the timeframe first so that...

Mr. Ken Ritter (Chairman, Board of Directors, Canadian Wheat Board): Mr. Chairman, we're available for longer than that if the committee so wishes.

The Chair: Normally we meet for two hours, but if we could just get a timeframe first, I can make sure people get their questions in.

Mr. Ken Ritter: Yes, we would have that time available.

The Chair: Thank you.

For the committee members, there's another issue we want to discuss, so we'll probably try to work toward an hour and an half. The other issue is an invitation from the U.S. agriculture committee of the House of Representatives. They have contacted our clerk and have indicated they would like to meet with the committee when they're in Quebec City on the weekend of April 22-23. It creates a bit of a problem, but we'd like to discuss that to see if a meeting of some sort might be arranged. Give some thought to that.

In the meantime, Mr. Ritter, I'd like to welcome you.

Mr. Howard Hilstrom (Selkirk—Interlake, CA): Mr. Chairman, on a point of order, or whatever you want to call it, I had asked in a previous meeting that the CFIA quickly come down for half an hour to present the emergency preparedness plan for foot-and-mouth disease. I assume that's scheduled for down the road.

The Chair: I think it has been sent out, Howard. It's Thursday morning.

Mr. Howard Hilstrom: Will we receive a package before we get there? Will we get the plan in our hands before we get to the meeting so that we can have a good meeting? Have they sent you the plan?

The Chair: Have they sent the plan?

The Clerk of the Committee: No.

Mr. David Anderson (Cypress Hills—Grasslands, CA): Have they sent something?

Mr. Howard Hilstrom: The media seem to have it.

I'm just concerned, Mr. Chairman, that while these other issues are certainly important, I think the examination of that plan by the Standing Committee on Agriculture is probably of the utmost importance. I'd encourage you to move the issue along as quickly as possible. The health committee managed to get the CFIA to come tomorrow; I just find it a little amazing that we can't do it here.

The Chair: No, no, Howard, they are geared up to come here Thursday morning to our meeting at 9 o'clock. We've also asked for representatives from the defence department because of the fact that British troops will be training in western Canada. I would hope that on Thursday morning... and certainly it wasn't an unwillingness on their part to be here, but rather to fit it into our agenda. The Wheat Board requested a meeting some time ago, which we have accommodated today. The fact that we're home for two weeks in our constituencies is a factor to get that information before we go home.

Also, as I mentioned a few minutes ago, in terms of the Americans, one of our largest doorways for visitors coming to Canada is the United States, and the committee probably should look at meeting with the U.S. representatives, hopefully during the April 20-23 weekend. It would be good for us to discuss their plan with them, because the millions of visitors who come to our country are travelling through the United States more than through any other area.

[Editor'Note: Inaudible]

Mr. Bob Speller: —

The Chair: They are visiting for the summit and their committee would like to meet with our committee. That's the request that is in.

So with that, I'm sorry, Mr. Ritter, to have kept you waiting. Would you introduce the other members of your group? You have 10 to 15 minutes to make a short presentation. I think you've been here before so you know our system. That will be followed by a round of questioning.

Mr. Rick Borotsik (Brandon—Souris, PC): Mr. Chairman, before we go there, have we resolved the issue of the American committee? Are they going to be coming here?

The Chair: No, I will bring it up in the last 30 minutes this morning and try to get some resolution on how we can answer their request.

Mr. Rick Borotsik: Let's do it.

The Chair: Mr. Ritter.

Mr. Ken Ritter: Thank you, Mr. Chairman.

If it meets with your approval, my directors would like to introduce themselves.

I'm Ken Ritter. I'm chair of the board and I represent an area in west-central Saskatchewan and east-central Alberta.

Mr. Micheal Halyk (Director, District 7, Canadian Wheat Board): I'm Micheal Halyk. I farm at Melville, Saskatchewan, and represent the east-central part of Saskatchewan on the board of directors, district 7.

Mr. Larry Hill (Director, District 3, Canadian Wheat Board): I'm Larry Hill. I farm near Swift Current, Saskatchewan. I represent an area that's southwest Saskatchewan, southeastern Alberta.

Mr. Ian McCreary (Director, District 6, Canadian Wheat Board): I'm Ian McCreary. I farm in Bladworth, Saskatchewan, which is right between Saskatoon and Regina in central Saskatchewan. I represent district 6, which is the central area of Saskatchewan and runs right up through the middle of the province.

• 0910

The Chair: Thank you, and welcome.

Mr. Ken Ritter: Thank you. Mr. Chairman, we have two other directors here as well—Bill Nicholson and Ross Keith.

I wish to extend my thanks for providing the opportunity for the Canadian Wheat Board to appear before the Standing Committee on Agriculture and Agri-Food to discuss some of the key issues facing farmers and the western Canadian grain industry.

These key issues include the commercialization of the grain handling and transportation system, international trade subsidies, food safety, and the possible impact of the introduction of genetically modified wheat in Canada.

As a brief introduction to the CWB, I will start by reviewing the changes made to our board structure.

The CWB has been criticized in the past for operating like a government bureaucracy. Some of that criticism was justified and some wasn't. Our new board of directors has been working with CWB staff to actively make changes to ensure that farmers' views, concerns, and interests are brought forward and used to develop CWB policies and programs.

Perhaps the most visible sign of these changes occurring within the CWB is our board of directors structure. Farmers in 10 districts across western Canada initially cast their ballots in 1998 to elect farmer candidates they felt could best represent them on the CWB board of directors. These elected directors, along with five directors appointed by the government, now head up the CWB.

Last fall elections were held in five districts, again providing farmers with the opportunity to select fellow farmers to lead the CWB. The number and calibre of candidates who ran for CWB directorships demonstrate western Canadian farmers' strong interest in the CWB and its operation.

The provision for a board of directors, the majority of whom are elected farmers, provides an effective means of keeping the direction of the organization in tune with farmers' needs and holding its performance publicly accountable.

My colleagues and I just held nearly 40 sessions across western Canada in which farmers expressed their views on what we're doing right, what they want improved, and where they see the CWB going in the future. We will listen and give full consideration to their input as we move along in charting the direction of the CWB.

An example of our taking action on feedback from farmers is the new pricing options the CWB introduced over the last two years. Last year we came out with our new fixed-price program that allowed farmers to lock in a value based on the pool return outlook, and a basis contract that allowed farmers to determine values against the Minneapolis Grain Exchange.

After this pilot project we went out and asked farmers what they thought of these programs. We then changed them to better meet farmers' needs for quicker payment and early cashflow. As a result, we announced in February that we would be expanding the fixed-price and basis programs. Amongst other things, instead of just offering the program for the top three grades of CW red spring wheat, as we did last year, it will now be possible to sign up all wheat and feed barley to the programs. As well, instead of just having weekly values, new values will be posted each day. Together with price pooling, these programs allow farmers to choose from a broad range of pricing and cashflow options that best meet their individual business needs.

It's important to note that both of these options are designed to provide farmers with flexibility without eroding the strength and benefits of the single desk and the integrity of the pooling system that most farmers prefer.

Of course, we can't sell Canadian farmers' grain unless we move it from the prairies to export position, and for this we must work together with the grain companies and the railways. As has been well publicized, transportation has been a contentious issue in the grain industry. But when you consider the magnitude of the changes that are being implemented, it's not surprising that views would differ. The CWB believes it has worked within the MOU it signed with the federal government, and it has worked diligently since that time to get the necessary commercial and contractual arrangements in place to move forward with implementation.

Much progress has been made on the details and we are optimistic that an agreement will be reached among the railways, grain companies, and the CWB that benefits farmers.

• 0915

In addition, it is imperative that Canadian shippers have access to a competitive rail sector if they are to maintain their market competitiveness and achieve long-term growth. This is particularly true for western shippers where many of the commodities are shipped in bulk and destined for offshore markets. Many of these shippers are reliant upon the use of rail transportation for moving their product to market. In addition, many of these shippers are primarily served by just one railway.

These factors, when considered in aggregate, result in some shippers receiving less than optimal service and rates from the railways. This is the very problem the Canada Transportation Act was to address. However, based on the CTA review panel's interim report entitled “Competitive Rail Access”, shippers are seriously questioning whether the panel will address shipper concerns by recommending measures to increase rail competition. This is particularly the case given the emphasis the panel has seemed to place on railway viability and the long-term investment opportunities.

We urge this committee and the government to refocus the panel's effort on its original mandate, that being to consider proposals for enhancing competition in the rail sector. Not only will increased competition provide for more favourable rates and service to shippers but it will also contribute to a healthy and vibrant prairie economy.

As a voice and vehicle for farmers' interest in marketing wheat and barley the CWB is obviously interested in agricultural trade policy. Several of our staff members and directors were involved in the Banff Cairns group meeting last fall where we participated in discussions on world agricultural trade issues. We see the World Trade Organization as the primary avenue to negotiate and administer trading agreements and rules that lead to both freer and fairer trade.

While WTO negotiations have established the rules for trade, we must continually work to improve the rules and to ensure that all players follow both the spirit and the letter of the agreements. Enforcement and implementation of trade regulations are key to success in improving the world trading environment for everyone. The new round of talks to liberalize trade may be launched this November in Doha, Qatar, when the fourth ministerial conference is held. In addition to the broad round, agriculture will be a key area of discussion. It is our view that the CWB has an important role in Canadian trade and trade policy, and the CWB should be included in these discussions on agriculture, in particular the trade of grain and the WTO regulation of such trade.

The CWB can be a strong voice to ensure that the interests of western Canadian wheat and barley growers are heard in this international forum. We feel our presence is necessary to fill this responsibility.

Food safety is an extremely important and growing issue in our business of wheat and barley marketing. Similar to other products exported from Canada, Canadian grain has enjoyed a global reputation for equality and safety second to none. We have benefited from some natural advantages, such as our cold climate that reduces insect and other infestations faced by our competitors. However, our industry has also implemented unparalleled measures to ensure that we do monitor and control such problems as they arise. Much of this current activity is conducted by the Canadian Grain Commission whose program for grain safety assurance has five major aspects: avoiding and preventing contamination; identification and control of suspect parcels; grain safety monitoring; research and development; and marketing and technical assistance.

In spite of this positive reputation our industry has faced increasing risks and pressures related to food safety issues. Some recent examples of issues and concerns include a Japanese pesticide residue monitoring system that includes tests for 15 chemical compounds in every grain shipment; tests for Fusarium head blight contamination, ergot, and micro-toxins, among other contaminants.

Our customers are increasingly demanding assurances that the products we are providing are safe.

Most recently the introduction of genetically modified organisms has brought the grain industry an entirely new and complex issue. There are no varieties of transgenic wheat and barley currently registered for commercial production in Canada or anywhere else in the world. The earliest any transgenic wheat variety could be considered for registration is 2003. Because commercial production of transgenic wheat is some time away, farmers, customers, and others in the wheat value chain have the opportunity to evaluate options regarding the registration and marketing of transgenic wheat varieties.

• 0920

It is clear that there remains a great deal of controversy around the issue of biotechnology and transgenic crop varieties, and the CWB will continue to focus efforts to ensure that the needs of farmers and customers are the top priorities in the debate.

The CWB acknowledges the concerns that many CWB customers express in relation to food ingredients that are the result of modern biotechnology. As a brief example, in January, the Department of Foreign Affairs mistakenly put a comment on its website in Rome indicating that Italian customers have concerns with wheat. By the next day, an international reporter indicated GMO wheat was under production in Canada. Within hours, the news had spread to customers around the globe and the CWB sales staff were swamped with phone calls, faxes, and e-mail messages from customers who had concerns about receiving shipments of GMO wheat. When they called, we could say without hesitation that there were no transgenic wheat or barley varieties in commercial production in Canada.

Despite our concerns, the registration of genetically modified wheat could still proceed as early as 2003. As the registration process is set up now, as long as the variety has a good disease resistance, agronomic value, and quality as the benchmark variety, it can be registered. Market acceptance is not included as a criterion to evaluate whether a new variety should be registered.

As well, under current regulations, once a transgenic variety receives food, feed, and environmental safety approval, it can be grown in unconfined conditions. These two components of the current regulatory system pose a significant risk to western Canadian grain exports. Under this system, a transgenic variety could be put on the market or find its way into export shipments before the necessary testing technology segregation proceeds or accepted tolerance levels are placed.

Given the level of sensitivity among a large number of CWB customers, this could result in a loss of millions of dollars to western Canadian farmers annually.

The CWB is working with the federal government and the rest of the grain industry to have market acceptance issues reviewed as a major consideration before the first transgenic variety of wheat is released.

Just to summarize, needless to say, this is a very difficult period for grain and oilseed producers across Canada. Their concerns have been voiced repeatedly. There is no quick or easy solution. As the directors of the CWB, we have two constituencies we must continue to serve: the farmers of western Canada, through programs and services we provide them, and the customers around the world who buy their products. Balancing these interests in both the short and long term is the key role for the elected directors. Selling prices, operating costs, margins, market share, market development, and customer satisfaction are all important aspects in keeping Canada on the leading edge as a wheat and barley marketer.

Listening to both constituencies, and acting to make improvements, will hopefully help us create additional value for prairie farmers.

Thank you for your attention, and we look forward to your questions and discussions.

The Chair: Thank you, Mr. Ritter.

Howard, are you ready to lead off?

Mr. Howard Hilstrom: Yes. Thank you, Mr. Chairman, and thank you, gentlemen, for showing up here today.

I'll question you in the order you made your presentation, Mr. Ritter, and first you were dealing with the changes in the board. One issue that came up, which I don't think was satisfactorily answered, with regard to the democratic elections you held—and I'm sure you consider them to be democratic—is, why wasn't the voters list made available, or was it made available, to the candidates?

Mr. Ken Ritter: The voters list is made available to the candidates. If you are a candidate running in the election, you receive a copy of the voters list.

Mr. Howard Hilstrom: The complete voters list. So they had that before the election—

Mr. Ken Ritter: Yes.

Mr. Howard Hilstrom: —and have had it since.

Mr. Ken Ritter: No, they are required under our legislation to return that voters list to the election coordinator after the election is completed.

Mr. Howard Hilstrom: And why is that?

Mr. Ken Ritter: It's just commercial information that may get out and we feel it's important.

• 0925

Mr. Howard Hilstrom: Okay. So let's just term it a limited democracy at the Canadian Wheat Board.

One of the most important issues right now is that the government has provided about as much support for agriculture as they can dollar-wise, so we have to be looking around for other things that can be done. You have mentioned your discussions with the Western Grain Elevator Association. Are Minister Goodale or Minister Collenette or their staffs involved in those discussions at all?

Mr. Ian McCreary: No. The government made its announcement, and it was left to the industry to sort out the commercial relationships. Our management team has had a number of months in negotiation with the elevator companies, and we've had an ongoing set of commercial discussions with the railways. It is, by and large, a set of commercial relationships designed to set up the contracting framework. The policy framework was laid out prior to the government's announcement.

Mr. Howard Hilstrom: You've got some legislative authority to act on behalf of the Wheat Board, and the idea is that you had an MOU between the Wheat Board and the Government of Canada under which you're proceeding. That's the basis of your negotiations?

Mr. Ian McCreary: Yes, that's correct. The government, as part of its announcement, laid out a framework under which it established a policy direction, and that's all laid out in the memorandum of understanding. We used that memorandum as a framework with the industry, essentially outlining the core pieces that each of the industry players had some accountability for, and that's central.

Mr. Howard Hilstrom: You're looking after the interests of the wheat and barley growers, but who in those talks is looking after the interests of the growers of the other grains and oilseeds and so on? Who's looking after those in this transportation talk, because they also need transportation? Are they at the table?

Mr. Ian McCreary: That's a good question, Howard. The key piece in the government's announcement was the recognition that the Canadian Wheat Board was accountable for the shipment of wheat and barley, and clearly the marketers of the other crops were responsible for the shipment of those other crops. The marketers of those other crops are the same grain companies that are our agents, and they are very concerned about making sure they have that capacity. The essential framework is that the grain companies have the capacity to contract with the railways for shipping of canola, peas, flax, and the other products they market. We have the right to contract with the railways for the shipment of wheat and barley.

Mr. Howard Hilstrom: So the Western Grain Elevator Association is actually representing farmers in regard to the non-board grains.

These talks have been going on for some time now. What is the big stumbling block—in just a couple of sentences? Why can't you come to an agreement? I don't mean the whole issue, just the essential issue or two.

Mr. Ian McCreary: The key question that emerges is having access to the Canadian Transportation Act's safeguards as shippers in the subsequent commercial relationships with railways. At the Canadian Wheat Board, as marketer, we have particular service needs from the railways, making sure the right amount of grain is available to us to market in port on an ongoing basis. As was the case in 1996-97, and as has been the case a number of times since then, we need to have the commercial levers to hold the railways' feet to the fire. The grain companies feel they have particular needs, and sorting out, if you will, that bundle of rights in a way that makes sure everyone's needs are met, looking forward to a commercial contractual arrangement, as opposed to some of the regulated frameworks that have been laid out in the past, has been the largest challenge of that negotiation.

Mr. Howard Hilstrom: Yes. I think when you look at the whole issue, it's still pretty highly regulated. What I learned in university about commercial contracts is certainly different from what I see the board trying to do and the government trying to do with grain transportation in this country. When are these talks going to finish? What happens if, say, there's no agreement by April 15?

• 0930

Mr. Ian McCreary: As you know, throughout this process there are various stages and various types of contracts being worked at. Grain has moved. Grain will continue to move.

As to where we are in the movement of our program, we're on target. We intend to continue to be—

Mr. Howard Hilstrom: My question really is, do you think it should come back to the House for a political solution to this? Or do we just let this muddle along forever, with the transportation and a lot of farmers on one side, and the Wheat Board and a lot of farmers on the other side? Is it going to muddle along? The comment I'm looking for is, do you not believe that Estey and Kroeger had the germ of some good ideas about savings that could be had for farmers? Their figure was pretty large, probably a maximum of $300 million, but even $100 million farmers would appreciate.

Mr. Ian McCreary: I would say that the core piece they brought in was the access question. The farmers, with the exception of the Prairie Farm Commodity Coalition, were all onside on the access and the Kroeger process. That didn't move forward, and now we're in the CTA process to work at that agenda. That's central to getting those savings in place.

Having more than one service provider on the rail network and the movement to more access is—

Mr. Howard Hilstrom: My last question is, how come—Ken, you're probably the better one to answer this—competition is good for the railways, but competition to buy farmers' grain is not good in wheat and barley?

Mr. Ken Ritter: There's a difference between a seller and a buyer of services, Howard. When you're a buyer of services, you want to make sure there's a lot of competition there. In the Canadian Wheat Board system, for handling and transportation, farmers are the buyers of services from the railway system.

Mr. Howard Hilstrom: When I sell my cattle at the auction mart and I have five buyers there, I get a lot better price than when I have one buyer sitting there. That's exactly the situation that wheat and barley farmers are sitting with at the Wheat Board right now.

Thank you, Mr. Chairman.

Mr. Ken Ritter: Can I just answer one of your questions, Howard, about—

Mr. Howard Hilstrom: Sure. We have a time thing here.

The Chair: Howard is 40 seconds over, unless, Murray, you want to...

Mr. Ken Ritter: I just want to answer the one question about whether you should be concerned about the state of transportation. I would answer no. Our handling agreement with the elevator association has been extended until the middle of May. There have been a number of extensions over the past year. Our relationship with the association has improved dramatically since the end of January. We're very confident an agreement will be reached in the near future that will benefit farmers and all players in the system. It is the commercialization of the grain handling and transportation system. We are signing contracts.

The Chair: Thank you, Ken.

Murray.

Mr. Murray Calder (Dufferin—Peel—Wellington—Grey, Lib.): Thanks, Mr. Chairman.

Ken, I'm interested in page 6 here, in appendix 1—grain production, millions of tonnes, Canada versus the United States. We've seen production from 1997 to 1999 go from 24.3 million tonnes to 26.9 million tonnes. Yet in the United States, even from 1998 to 1999, it went from 69.3 million tonnes to 62.6 million tonnes. That's 6.7 million tonnes that it went down in the United States. What's the reason for that?

Mr. Ken Ritter: One of the reasons would be just weaker crop conditions. Also, as I understand it, their loan rates and subsidy programs favour soybeans over wheat, so that is another reason. It's just the farmer's choice, there as here, as to which crop you decide to go with.

Mr. Murray Calder: There are no set-aside programs on acreage or anything else like that?

Mr. Ken Ritter: No, there aren't.

Mr. Murray Calder: As you know, we're putting together a task force right now to take a look into subsidies and the like. I was wondering whether or not that was the issue.

• 0935

There has been a lot of talk about a possible merger between CN and CP, with CP divesting its rail interests. Have you been monitoring this? What are your opinions or concerns?

Mr. Ian McCreary: The answer is yes, we have been.

Our primary concern is this. As you know, the government has made the decision to move away from regulation of rates and service as a mechanism to protect producers. In the area we're familiar with in western Canada, producers are extremely concerned that, in the absence of regulation, they will need some competitive elements to do that. And clearly, if you have a single carrier, the path to competition would be much more difficult to see.

Mr. Murray Calder: Okay.

I've been in conversation with the Sask Rally Group, for instance, and I'll read out some of the points they're putting forward right now to try to get them through this tough economic time.

For instance, they're looking for a tax reduction in a number of areas: on what they refer to as the hidden tax on fertilizer and pesticides; in the fuel tax, the excise; in the tax on transportation services; and in the user fees on cost recovery. An interesting suggestion here is to allow freight and elevation as eligible NISA expenses.

Is this something the Wheat Board itself is going to start lobbying the government for? Anyone who wants to can respond to that.

Mr. Ian McCreary: When it comes to very specific subsidy mechanisms, we haven't taken it upon ourselves to view them one at a time.

We have taken a look, as you see, in aggregate, to recognize the general support levels available around the world to different producer groups. We haven't gone to the point of saying we think this particular subsidy mechanism or this particular tax change is a mechanism at this point.

Perhaps Larry, who heads our trade committee, wants to comment further.

Mr. Larry Hill: I had the opportunity to visit the National Association of Wheat Growers' meeting in the U.S., and I saw how effective their lobby is.

As representatives of producers on the Wheat Board, we are torn by whether or not to become advocates or strict caretakers of the board and the governance function. But producers have told us they want to see many of the things you have asked for. We have had a series of meetings where they have certainly made it plain to us that they would like to see us advocate for those things, but we haven't made the decision as a board to do that.

Mr. Murray Calder: Okay. Now, you've had an elected board for a while.

Do you see the CWB itself starting to go through a metamorphosis, and if so, where do you see everything heading at the present time?

Mr. Ken Ritter: Well, we have had our second elections. We had one change in that election, and as I indicated in my earlier remarks, we will reflect the views of farmers. I feel very strongly that the way our democracy works is fair, legitimate, and responsible.

In answer to your question, these are my observations as chair of the board. We started with a blank sheet of paper, and over the last two and a half years I think we've matured a great deal. Now if you came and viewed our board of directors' meeting, I'm sure you wouldn't see any difference between it and the board of directors' meeting at some private corporation, for example. We're effective, we're structured, we're responsible, we're accountable, and, as I say, we have matured.

As for a process of metamorphosis, yes, we do have one. We have a process through which we deal with all the issues and problems and concerns we face as an organization. We handle them much as you do—through a committee structure first, with recommendations to the board, having a staff work-up and so forth. From there we have our debates, as you do, and make our decisions.

Mr. Murray Calder: Okay.

Right now, the papers are full of what's happening over in the U.K. and Europe itself with hoof-and-mouth. Do you see having any effect on grain exports coming out of the U.K., because this is very contagious, a very easy virus to take in transport?

Mr. Micheal Halyk: We don't see any changes as far as grain exports are concerned. Obviously our sales people would be monitoring this very closely.

• 0940

What's more important is what happens in the countries unaffected by hoof-and-mouth at this point, because they obviously would be the countries of choice for the buyers to go to, simply because of the concern that would be there in those other countries. At this point, because of the stringent rules we have had in this country, we are one of the countries of choice for buyers to look at.

Mr. Ken Ritter: We've had no concerns expressed by our sales staff on this issue.

Mr. Murray Calder: So are you telling me you could this as a positive, then; that international buyers not underneath the vaccination program will probably be looking very favourably at purchasing Canadian grains?

Mr. Ken Ritter: Absolutely.

Mr. Murray Calder: Okay.

Thank you, Mr. Chairman.

The Chair: Thank you, Murray.

Madame Tremblay.

[Translation]

Ms. Suzanne Tremblay (Rimouski-Neigette-et-la Mitis, BQ): Thank you, Mr. Chairman.

Thank you, gentlemen, for your presentation. In the section dealing with trade, you mention that market access is an area of primary concern to you. You also say that tariff rates reductions are extremely important in the perspective of a fully free and accessible market.

You talk about the next round of talks to be held in Qatar. As you probably know, Qatar has not been chosen without a reason: it is the only country in the world where demonstrations are forbidden and it is in the middle of the desert. At last, the industry will be able to meet quietly.

You mention that agriculture will be a key area of discussion. Anyway, everybody says that agriculture should get it in the neck in the next rounds of negotiations since those who are concerned are trying to get a hold on everything and they have only three things left, including agriculture and culture, not for the purpose of globalization but rather to americanize trade completely, in their strong determination to make money, even if they destroy the whole world, without any regard for the environment.

You consider that you should be part of the Canadian delegation. Since you are thinking today that you should be part of the delegation in November, what kind of moves did you take, what documents have you produced and what do you ask the government of Canada to ensure that agriculture will not be sold at a very cheap price during the next negotiations, in Qatar?

[English]

Mr. Larry Hill: Thank you very much for the question.

The Canadian Wheat Board took part in the formulation of Canada's agricultural trade policy. We attended the convention in Ottawa. We have met at various meetings around the country. We do support the policy the federal government has adopted in terms of agricultural trade.

We do recognize, of course, that the United States is one of our competitors in the world marketplace, and it's very important for Canada to maintain its ability to export grain on a level playing field with the world competition we face. The board would try to provide input into the discussions to make sure the policy that has been adopted is the one put forward.

[Translation]

Ms. Suzanne Tremblay: Are you able to provide the committee members with a document which would reflect exactly your basic claims, what you do not want Canada to let go? As you know, in a negotiation, there is always some give and take. What would you not want the government to let go during those negotiations? In your opinion, what is the limit over which we should not go? Are you able to let us know your real position so that we are certain, as elected representatives, that the government of Canada is going to really defend you to the very end?

[English]

Mr. Larry Hill: One of the very major items identified by the United States is state trading enterprises. They see it as a threat to their share of the world markets.

At the meeting I mentioned, the National Association of Wheat Growers' meeting in New Orleans, they outlined how the United States has lost a very substantial market share over the last thirty years. They pointed out that Canada did not lose market share, and they pointed out that Australia did not lose market share.

• 0945

So the United States wants to have state trading enterprises taken away from countries that do have them. That's going to be one of our bottom-line issues. We feel that Canada's farmers have a right to have this organization. Canada is a sovereign country, and we can sell our grain on the world markets in the manner that we see fit. We think the Wheat Board is a fair trader, allowed under the World Trade Organization rules, and this is the venue around which the debate should take place.

When it comes to market access, of course we hope that tariffs would be brought down. It's not one of the key giveaway issues, just something that would be negotiated for trade. But the state trading enterprise issue is the big one we will have to face and to advise the government on.

The Chair: Merci, Suzanne.

Would you like to speak now, Dick?

Mr. Dick Proctor (Palliser, NDP): Thank you.

Gentlemen, good morning.

I was really struck by the tone of the paragraph at the bottom of page 3 on trade, which Mr. Ritter read into the record this morning. It seems you're almost coming before this committee on bended knee, as it were, to say the Canadian Wheat Board deserves to be in Doha, Qatar, this fall. From the tone, obviously no decision has been made about whether or not the Wheat Board will be part of the Canadian delegation.

Could you clear up the confusion that may only exist in my mind on this?

Mr. Larry Hill: I understand there has been no decision made on the board being a part of the delegation.

We think the board plays an important role by representing producers in international trade, and would be helpful as an adviser to the government at these talks.

Mr. Dick Proctor: Presumably you have made your position known to the folks deciding on who will be going.

Mr. Larry Hill: Yes, we have made that position known.

Mr. Dick Proctor: In the Wheat Board annual report I noticed that last year you spent in excess of $700,000 once again defending state trading enterprise and the position of the board against our friends to the south. It also said that eight times in the last nine years—or nine in the last ten—you've successfully defended this.

As I understand it, North Dakota still has an opportunity to respond, or there's a timeframe in which they may respond. What's the status of this?

In conjunction with what is now going on on the softwood lumber front... it seems to be similar. The Canadian position seems to be vindicated each and every time, but we continue to go through these roles each and every time.

Mr. Larry Hill: You're referring to the 301 trade action currently going on?

Mr. Dick Proctor: Yes.

Mr. Larry Hill: I understand it's in the hands of the U.S. trade representative's office now. They will be deciding how to move forward with it. This is something that's very political.

I have had a chance to meet with producers along the border states of Canada, and of course this is where the major tension comes from. As producers, they see Canadian grain coming to their markets and they would like to limit it. It's very similar to the softwood lumber example.

These states have gone to the other grain organizations in the United States and lobbied for their support to go ahead and get the government to take this action. We feel there is in fact no basis for this 301 action. It's based on innuendo and no actual facts.

It's really frustrating. I have been at meetings where the U.S. politicians in the grain industry would say, well, the Canadian Wheat Board won't show us their prices, where in fact when the Commerce Department of the United States comes to the board, they look at sales and they see prices. They have seen that the Wheat Board is in fact getting reasonable premiums compared to grain moving to the United States, but they don't tell their producers.

So what we have here is a very political debate, and unfortunately, it's going to be Canadian grain producers footing the bill for this. We have no choice. If we don't go ahead and defend the board, they will assume their information is correct, and the end result could be a tariff along the United States border that could cost Canadian farmers millions of dollars.

• 0950

Mr. Dick Proctor: A couple of years ago a suggestion was made that American grain could move up and through the Canadian line to Vancouver. What's the status on that? Have there been any developments on that? Has it been insignificant? What's the situation?

Mr. Ian McCreary: It is of course legal under that agreement. The volumes, to the best of my knowledge, are limited. I am not aware of the most recent one. There was a trial run. I haven't heard of any significant volumes on that front.

Mr. Dick Proctor: I have one final question. About a year ago Ministers Collenette, Vanclief, and Goodale were telling all and sundry that there would be a reduction of $5.92 a tonne for grain. The Canadian Wheat Board, I think correctly, says that it continues to represent and speak out for farmers. What have you folks noticed on that? Producers are contacting my office and saying they're not getting anywhere near a $5.92-a-tonne reduction.

Mr. Ian McCreary: That's correct. We appeared before the transport committee and identified a number of the provisions that would limit that once that bill was passed.

The concerns are, first of all, you move from a rate cap to a revenue cap, which legislated the maximum to the average. The average is now $5 below what the maximum used to be, but many are paying the maximum. That essentially has to do with the fact that different levels of service are charged different rates.

The other major issue, as we identified when we appeared before the standing committee on transportation, has to do with the whole area of what they call industrial development. Historically, it was paid to grain companies. It was allowed to inflate that base, which takes fairly significantly away from the savings producers received. So the observation from producers is that the saving was something less than half of the...

Mr. Dick Proctor: Thank you. Thanks, Mr. Chairman.

The Chair: Thank you, Dick. Rick.

Mr. Rick Borotsik: Thank you.

Dick has been known to look at other people's notes, and that $5.92 was written down here—

Mr. Dick Proctor: No, I make my own notes, Rick.

Mr. Murray Calder: He also takes notes.

Mr. Rick Borotsik: He does. That's what I was referring to.

Some hon. members: Oh, oh!

Mr. Rick Borotsik: Gentlemen, welcome. It's always nice to see you here, and I mean that sincerely. It's nice to have the Canadian Wheat Board appear before us. We recognize that there are some differences in philosophy, but we do work together. I think the ultimate goal is the same: to do the best for producers.

You've touched on transportation. I'm not going to deal with that.

I'd like to see you do some crystal gazing. I think we all recognize that there's a really serious issue in agriculture right now with regard to commodity prices on grains and oilseeds, particularly your grains of wheat and barley. We have the production for 1999. Can you give me what the production was for the 2000 crop year, and can you tell me what you see happening in the 2001 crop year? I have producers who may not be putting crops in this year for any number of reasons. Do you see a reduction in the 2001 crop year?

You also talk about—and I find this to be very positive—the country of choice. I agree that Canada is seen nationally and internationally as having the safest, best quality wheat and foodstuffs anywhere in the world. Do you see that adding to our premium market price going into the year 2001?

Mr. Ken Ritter: Rick, I'll take a stab at some of those issues, and then I'll ask my fellow directors to also comment on them.

My understanding is that we had about a 20-million-tonne crop in this last crop year.

Mr. Rick Borotsik: That's substantially lower than last year.

Mr. Ken Ritter: It's a little bit lower than last year.

Mr. Rick Borotsik: What was it?

Mr. Ian McCreary: It was 26.9 million tonnes.

Mr. Ken Ritter: I might be wrong. It may be as high as 25 million tonnes. I think it was a 25-million-tonne crop. I didn't include durum in there.

Anyway, prices have gone up a little bit for the crops the board marketed in this last crop year. What information I have, particularly from our weather people, is it looks as if for this coming year prices are going to improve, or at least the fundamentals are there to see that happen. The stocks-to-use ratio is declining substantially for wheat, which always leads to price increases, or it certainly has in the past. So the fundamentals are pretty favourable—

Mr. Rick Borotsik: Can you expand on the stocks-to-use ratio? I'm told that right now the stocks internationally are the lowest they've ever been.

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Mr. Ken Ritter: They're about 18% right now. They are the carry-over in stocks you have on hand as a ratio to the use. They're predicted to go down to 14% over the next year.

Mr. Rick Borotsik: Why is that not reflected in the price of the product?

Mr. Ken Ritter: Because we have a just-in-time world right now. So far, when buyers have gone to the market, they've always been able to get what they want. But the margin there is narrowing so dramatically that even one event, I feel, can change the dynamics around prices.

Mr. Rick Borotsik: You mentioned, Mr. Ritter, that we're expecting less yield in 2001, and you've indicated that prices are going to increase. Can you give me a better handle on it as to what you believe? By the way, you're pretty sophisticated, with weather and yields and all the rest of the stuff. As the Canadian Wheat Board, you understand what's going on in the marketplace. What can my producers expect for the 2001 crop prices for wheat?

Mr. Ken Ritter: Our PRO is a pretty good indication on a monthly basis as to where we think the market is going.

Mr. Micheal Halyk: As of the end of February, we start putting out the PRO for the crop the farmers will be planting in the next month or two, and that PRO was very strong compared to the present crop year, except in durum. Durum was the reverse. However, we are one of the huge carriers of the excess in durum.

One of the weights we have to look at, which is a very big factor in the world market, is those stocks that are being held by the two countries that use subsidies very heavily within their own marketplace, the United States and Europe.

Mr. Rick Borotsik: I agree.

I have one more question, Mr. Chairman. I'm going to jump in here before he cuts me off. He's really nasty.

You mentioned, Mr. Ritter, that there have been limited changes to the board's makeup. There was only one change to the board of directors. You then talk about how you look forward based on how the producers see the board. Based on the limited changes to the board, do you see very little change in your philosophy as you go forward? Obviously, the producers have given you carte blanche on the way it is right now. Do you see any changes philosophically to the board?

Mr. Ken Ritter: I also mentioned, Mr. Borotsik, that we held 40 meetings in the country, and I want to reassure you that we listen to what farmers are saying. Five other directors are up for election in about a year and a half, and they also are listening to what farmers are saying. So it's an ongoing dynamic process where I feel strongly we react to the views and observations of producers.

Mr. Rick Borotsik: Do I have some time left?

The Chair: Yes.

Mr. Rick Borotsik: I'm a little concerned about your position on biotechnology, particularly GMOs. I wonder if you could just very briefly expand on that. As I read this and as I hear the presentation of Mr. Ritter, I get the indication that you're prepared to live with the status quo. You're not prepared to look at the future of the GMO. It says right here that as long as there are certain caveats, you'll look at it. Am I interpreting this incorrectly, or do you actually embrace genetically modified organisms and biotechnology?

Mr. Micheal Halyk: Earlier we did some crystal gazing and talked about the country of choice. What we are flagging is that a number of buyers in the 70-some countries we market into are saying to us that they will walk away from Canada if GMO wheat is in the marketplace. So we are suggesting very strongly that market acceptance needs to be one of the criteria for GMO wheats when it's being looked at. That may change as time moves forward. Being a marketer, we have to look at all sides. Five years from now that situation may be such that those countries will not be hesitant to buy from a country that has GMO wheat. But at the present time we're asking that market acceptability be one of the criteria for GMO wheats. I think it's a very, very important issue. This afternoon this same group of people is going to be looking at the hoof-and-mouth disease problem. It is a similar situation. If your country is found to be a problem, you're out of the marketplace. It's the same for the GMO issue. At the present time we're out of the marketplace in some countries. With the huge pressures we see on prices, we can't afford to be out of any market at this time.

Mr. Rick Borotsik: Thanks.

The Chair: Thanks, Rick. You have to acknowledge that you got nearly two minutes extra.

Mr. Murray Calder: You gave Rick two minutes extra?

The Chair: It was a good question, though, Rick, and it's something we should...

I understand that all of you are producers and that you are elected. How many acres do each of you have in grains production? Could you just give that information to our committee?

Mr. Micheal Halyk: I'll be seeding around 3,000 acres this spring.

Mr. Ken Ritter: I farm 3,600 acres, but I probably won't seed it all. I'm in a dry part of the prairies. It will likely be in the neighbourhood of 2,200 acres or so.

• 1000

Mr. Larry Hill: I've farmed around 5,000 acres right up until this year. I've decided to rent out a portion of my farm. I'm going to be down to about 3,000 acres. The board job takes a lot of time.

Mr. Ian McCreary: I farm about 1,800 acres and will seed about 1,300 or 1,400 acres of that.

Mr. Rick Borotsik: In Saskatchewan and Manitoba, these are small farms.

The Chair: Thank you.

We'll go to Mark now.

Mr. Mark Eyking (Sydney—Victoria, Lib.): Thank you, Mr. Chairman.

In looking at page 8, appendix 1, the comparison between Canada and Australia, we have very similar production techniques. Our currency is probably the same, compared to the U.S., and I see we both have about 25 million tonnes. On the subsidy change, we've gone up about $2.50, and they've dropped $3, but anyway, it's a subsidy of around $10 a tonne.

I have three questions, if they can be answered in the time available.

Here is my first question. We have the Canadian Wheat Board here; what is the comparison with Australia's marketing system?

My second question would be on the U.S. comparison to us in subsidies. They have 46% and we have 11%. If you subtract that, it's a difference of 35%. What bearing would the strong U.S. dollar have on that with our competitive advantage?

Third, with the drop in meat consumption in Europe, I guess there's going to be a lot more grain and wheat available in Europe, plus a lot of land that livestock was on might go into grain production. How is that going to affect the international scene on grains?

Mr. Larry Hill: I'll start with the Australian system. It's very similar to the Canadian Wheat Board system. It's a single-desk seller. However, they have gone further than we have in privatization. It's AWB Limited; it's a corporation, so it has a share value, and the Australian producers own shares. But they do use the single-desk sales method, very similar to what Canada does.

On the U.S. subsidies, one of the real dilemmas we have here is the U.S. farm bill. I don't know how much you've looked at that, but the last U.S. farm bill decided they would allow the American producers to grow whatever they wanted, in whatever quantity, and then they would sell it on the world market at market-clearing prices. In the meantime, the government would support producers to make up the shortfall.

The dilemma for us in Canada is that most of our grain is sold on a market discovery platform in the United States. So we take the prices established in the United States where grain is produced in excess of what the true market signal would be, because of the subsidies. That's the problem we have in terms of receiving a fair price for our product with these huge subsidies.

Mr. Mark Eyking: But the question about the U.S. dollar...

Mr. Ken Ritter: Can I answer that question in this way? I did some calculations the other day. If I seeded my whole farm to wheat, what would be my difference versus the difference for the U.S. farmer who farmed just across the border? I think that's an important number.

As they get $2.74 a bushel more than we do, as an individual farmer I would get $150,000 from the government.

Mr. Mark Eyking: But that's not my question. The U.S. dollar—

Mr. Ken Ritter: The difference in currency values is equated into that.

Mr. Larry Hill: I don't think the U.S. dollar situation in the world marketplace is that relative to Canada, because the Canadian Wheat Board mostly sells grain in U.S. dollars. We just convert it back to Canadian currency and receive Canadian dollars for it.

I had the opportunity to price out a combine last fall, and there was one little line that said U.S. dollar adjustment. I think it was $60,000 that it added to the price.

So for a Canadian farmer, when I sell my grain, the base is U.S. dollars. I'll buy my major inputs based on U.S. dollars as well, but we just do it in Canadian currency.

As for Europe, I don't know if I'm the one who should reply to that or not.

Mr. Ken Ritter: I don't know if there's a very good answer to that yet, or if anybody can really determine exactly how this whole foot-and-mouth issue is going to impact on world grain sales. I think it's a little too soon to tell yet.

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The Chair: Thanks, Mark.

David.

Mr. David Anderson: I'd like to thank the witnesses for coming here today.

Given that even your own surveys demonstrate that a majority of producers want some marketing choice, and secondly, given that wheat is worth next to nothing right now, and also given that western Canadians are sick and tired of supplying raw and processed products so the rest of the country and the world can make money off of them, when are you going to modernize this system so that western Canadians can improve their economic position by allowing domestic processing?

Mr. Larry Hill: This value-added debate is something we've spent a lot of time on, and what it has been is a magnet for political debate. If you focus on the economic issue, you'll find that the Canadian Wheat Board policy does enable producer investment and value-added.

If you come right down to the bottom, if a farmer is going to invest in value-added, it has to be based on a sound business plan.

I would love to see a durum plant in Swift Current. We've had a couple of studies, and there have been plants looked at in other areas of the province. But what the board's policy does is to put a producer-owned plant on the same level playing field as a plant that's owned by ADM, for example, that does 50% of the milling in Canada.

A producer in Lethbridge can invest in a plant in Weyburn, for example, on a level playing field where he would receive all the benefits that would accrue to the investment in the plant, but he doesn't have to truck his durum to Estevan. So you save on the roads and all sorts of other costs. The board's policy enables stock switching to allow these producers to do that. When you look at the high cost of investment, I think this is something very major in terms of contributing to value-added.

Mr. David Anderson: I find it interesting that some of our small towns have been able to put in processing plants in specialty crops. They're providing lots of income and lots of jobs in our communities, and wheat is absolutely dead as far as anybody being able to develop anything with it.

You can defend it all you want, but the political part of it comes as much from your side as it does from anywhere else.

Regarding my second question, you wrote in here in the beginning that the CWB has been criticized in the past for operating like a government bureaucracy. We have people going into the fields in the next week around my area, and I think we've seen another example of bureaucracy here over the last couple of weeks with the cash advance program. I had people phone me yesterday. The forms are not even out. You come to a deadline for when you're supposed to be able to apply, but the forms are not out. They called in about it, and they were told they can't e-mail or fax them.

So you're sitting there with a program that has been very well advertised as the government's star program, and it can't be administered properly enough that people can get their money before they start to seed their crops.

Mr. Micheal Halyk: I assure you, you're asking a good question. I think that question is probably best asked of the federal government. The cash advance program is the federal government's program. We're the administrators of that program.

I, too, checked at the local elevators yesterday to see if the forms were there, because we were advertising on our website that April 2 was the kickoff date. The forms weren't all there. Upon checking further, the follow-up was that there were problems within the federal government in getting the exact wording on those forms so that they could be printed and sent out to us.

I apologize, but we're only the administrators. The question is best sent over to the federal government.

Mr. David Anderson: I know what the problem was with the wording. It was between the two and the five; they didn't know if it was $20,000 or $50,000. That's what we were told the difference was. They or you couldn't get the forms out in two weeks because they didn't know if they should put a two or a five down. That's unacceptable.

Mr. Micheal Halyk: That's not us. We are only the administrators of that program.

Mr. David Anderson: On another question, the buyback program continues to be a major irritant for a large number of farmers, and especially those of us who have had to try to deal with it. It has been true for many years that farmers who have developed special contracts with importers have had trouble with it, and this is also true of producers of organic wheat.

Our organic producers and others realize that the board is removing the added value from their wheat, which flies in the face of your mission. It's estimated that 33% of organic wheat producers take advantage of the buyback; 66% sell to the exporters accredited by you. Why can the export of organic wheat not be done directly by producers themselves without having to go through the buyback program?

Mr. Micheal Halyk: As a board, we have spent a fair amount of time this past year, or year and a half, dealing with the organic growers, trying to get a feeling from them as to what they really want.

I want to assure you that the organic community has mixed views on this, so it has been an issue where we've had to do some balancing, to say the least. We have streamlined the buyback process to allow those producers to come to us and the board do the entire financing so they would not have to put any money up front. That process is going to be in place very shortly.

• 1010

I also want to suggest, regarding the organic producers on wheats—the main commodity they'd be coming to us on—that only about 25% of the wheat that's exported as organic is done directly by those producers. The rest is done by private firms who then take a substantial fee for doing that work for them. We want to make sure those producers get all that money back for a very small administration fee.

As you see our changes—that we have now just put in place—work through the system, those producers who are going to get used to using it are going to find that we're doing a very good job.

The other side of the coin is that we do relate to them what we're in the market for in the particular part of the world where they may be going, which is valuable information for them, so that they aren't necessarily undercutting themselves. That's important, and the buyback procedure allows that to happen.

Mr. David Anderson: I know there are producers who want to sell their own wheat. They've done a good job of it, and you're one of their competitors. They're willing to compete with you, but they don't want to be subservient to what you're doing with that.

The Chair: You're about a minute over there.

Larry.

Mr. Larry McCormick (Hastings—Frontenac—Lennox and Addington, Lib.): Thank you, Mr. Chair. I just want to thank the witnesses for being here.

I certainly will look forward to finding out later today where the spring advance forms are. In the previous year, did you get those forms directly from the federal government? You did not design or hand out your own forms. You used the ones from the...

Mr. Micheal Halyk: That's right. There's a correlation between the Department of Agriculture and our people, and that would be a better question to ask of our staff person. The only reason we would know about it is that we're practising farmers too. So we would be very tuned in to that, which is the important part of why this corporation has gone to the type of board of directors we do have.

Mr. Larry McCormick: I appreciate all of that, but as Mr. Anderson said—I don't know about your areas, but thank heavens Alberta is getting some moisture this week, and I hope you're getting some too—these forms are needed now. I thought perhaps there would be nothing more important to you, as directors, than to know where the forms are, because I would think that people would have to use them.

Mr. Micheal Halyk: I can make a commitment to you. I hadn't known about this issue until it was brought up this morning, but we can make a commitment that we're certainly going to look into it right after this hearing to see where that's all at.

Mr. Larry McCormick: I believe we will too. I'm thinking about Mr. Hoeppner, a fine member of Parliament who used to sit here, who always asked about audits and so on. But the Auditor General undertook an audit of the Wheat Board last year. I'm just wondering—I know that Auditor General is gone—what stage that audit is at. Can you tell me a bit about that, please?

Mr. Larry Hill: We have been negotiating with the Auditor General for over a year to outline the framework and come up with a plan that the Auditor General would have for auditing the Canadian Wheat Board.

There was a very political controversy here where a lot of people didn't believe a firm like Deloitte & Touche... There's an element of producer doubt out there that said, well, you pay an audit firm like Deloitte & Touche—

Mr. Larry McCormick: I think it was politically driven, but that's another story.

Mr. Larry Hill: Well, there's no question about that. When the Auditor General came to the Wheat Board, the office said they didn't want to do a financial audit. They wanted to do a value-for-money audit. So this is the kind of issue we had to negotiate. We told the Auditor General that producers wanted to be assured that the funds were allocated as they should be. The Auditor General, after a lot of discussion, agreed to do that, and also to do a value-for-money audit of the various segments of the board's activities. They have had a tough time lining people up. It's my estimation that they will wrap this work up early next year.

Mr. Larry McCormick: Early next year, okay.

I know Mark asked you a question about further land going into production for grains in Europe and so on. But the BSE is costing the United Kingdom up to at least $20 billion for now and into the very near future. It's going to cost the EU $100 billion for the mad cow. That's before hoof-and-mouth broke out. Now Mr. Blair is talking about what it's costing every week for tourism, and it's a horrendous cost. But should this not help somewhat in the reduction of the European Union subsidies of grains and oilseeds in the near future? What are your thoughts on that?

• 1015

Mr. Ian McCreary: In many ways, this is a follow-up on Rick's question.

Mr. Larry McCormick: Yes.

Mr. Ian McCreary: There's a netting-out effect here in the sense that there's a resource reallocation, probably from livestock to grains, and there's a resource total.

Larry, we can follow up by having our people provide you with our estimates on the direction—how that's going to shake out. We are not in a position to quantify that at this point.

Mr. Larry McCormick: Okay, and thank you.

I'll probably ask this question. I don't mind asking it on the air. It's a valid question. Canada was built on the natural resources that we have coming out of the ground and growing. You do a great job of that. Yet things go full cycle as we're back to cooperatives across the country. So back to Prairie Pasta.

I was in the west in the last ten days—and I have three different types of questions. Do you not think, as the Canadian Wheat Board, that there is room for cooperatives? I would think the Wheat Board, which does such a great job of marketing, could cooperate more with these cooperatives within Canada.

Mr. Larry Hill: Well, as to coming up with a suggestion for Prairie Pasta, we did come up with what I think was a good policy for them that would really help. They did a business plan study, and it said don't build because it doesn't pay. That's the dilemma they came up with. Their analysis said it's a mature industry; if you build a plant, you won't be able to make any money. Go to a partnership with some other organization. This is the summary they have put out to the public. So they are now looking at other options with Dakota Growers.

But when it comes to value-added, I do believe the board can help value-added plants. When it comes right down to the bottom line, the board's policy was worth more money to a value-added plant than other options.

Mr. Larry McCormick: Thank you.

This is my final question for now, Mr. Chair.

We hear different groups asking about a set-aside program. You are close, you're on the ground—working the ground. I understand there's up to 25% more land in production in Saskatchewan, for example, than there was when I first started going there, and that's a long time ago. Whether it's an official view of the CWB or not, do you think this could help? Also, are you in favour of us looking at a set-aside, or whatever we want to label it?

Mr. Ian McCreary: I just asked our chairman this morning if I could comment on that question. We do not have a formal position as a board.

But I think you have personalized it. I would say, from a personal perspective, there is a real question as to whether that is... I think it's a very positive way. Subsidy reductions are going to take a decade—at a minimum—to wind their way through to having an impact on prices, and there are very few people in western Canada who can wait a decade.

The only way to change that from being a decade away to being short term is to look at some type of set-aside or offset program to do that. That is a personal observation as opposed to a—

Mr. Larry McCormick: Thank you very much, Ian.

The Chair: Thank you.

I want to go to some members who haven't had an opportunity yet.

Dick, can you be patient with yours for a second? I'm going to ask Kevin next, and then if there are others...

Mr. Kevin Sorenson (Crowfoot, CA): Thank you.

This is the first time I've asked a question at an agricultural committee, because I'm an associate member on this committee. But I am a farmer. In fact, Mr. Ritter, you are the delegate in my area. I voted for you the first time and—

A voice: We'll leave it there.

A voice: I really can't say the same.

The Chair: He's under assessment, is he?

Mr. Kevin Sorenson: The Canadian Wheat Board is a big issue in my riding, as you're probably all aware. Some of the flexibility you talk about in some of the literature you've sent out discusses the freedom the farmers have been given. One of my questions is, how well were some of those new pricing options used?

Also, I would like you to address the amount of money that is sitting in the contingency fund. Last year, on your initial pricing, you took such a wide basis—the initial basis... You've narrowed that this year. Perhaps you could address the amount of money that's sitting in the contingency fund.

Also, could you elaborate on any of the recent rumours about Alberta creating a Canadian Wheat Board offset program? Are you aware of that? It was written up this week in the Prairie Centre reports.

• 1020

If there's any time, I'll come back to another question and get some answers.

Mr. Ken Ritter: Well, insofar as freedom is concerned, first of all, I'd like to explain that when the Canadian Wheat Board has a basis contract, the numbers are exactly the reverse of the private grain trade. So the higher the number we have, the better it is for farmers. It's a price over Minneapolis.

So the argument we would bring forward is, even if marketing freedom were there, what difference would that possibly make? It's just the pricing choices that really count. An elevator wouldn't offer me more than the North American price. So this option allows a farmer to establish that basis—right now it's around $18 a tonne above Minneapolis. Then it's your choice. You can take a December or a March futures contract and choose when you want to take that price.

Mr. Kevin Sorenson: How many people—

Mr. Ken Ritter: Last year 30,000 tonnes were committed to it. It was a pilot program. I believe there were 117 basis contracts, if I remember my numbers correctly, and seventy-something fixed-price contracts.

Our early payment program for barley had nearly 2,000 applicants for about 300,000 tonnes. This year we introduced it on March 22, on a daily basis. The numbers I received recently indicated that 15 individuals had signed up, I believe, but the amounts being signed up were large—an average of 500 tonnes per individual. That's 16,000 bushels, which is a significant amount.

Mr. Kevin Sorenson: So 15 farmers?

Mr. Ken Ritter: That was within three days of us announcing the program. This program goes on a daily basis until the end of July.

Mr. Kevin Sorenson: But you'd probably be disappointed with the number of farmers who actually took that step last year, wouldn't you?

Mr. Ken Ritter: Well, we had anticipated that it wouldn't be a huge number. This option is available, but it's up to farmers to sit down with their pencils and paper and add up the numbers. I suggest you can compare it to the offers made in off-board crops, and I think this is a pretty favourable number.

Going to your next question on the Alberta offset program... I was at the Western Barley Growers conference in Calgary, along with Mr. Hilstrom, and it was mentioned there. Other than that, I really don't know a whole lot about it.

Mr. Kevin Sorenson: It may have dealt with the contingency fund.

Mr. Ken Ritter: Oh, the contingency fund.

Mr. Ian McCreary: The amount of money in the contingency fund depends on how the year unravels. It's based on how the program performs relative to the total sales program, and those hedges are lifted as it unwinds. So essentially, that number doesn't clarify itself until the pool account closes. By that time, we have a pretty good indication of where it's at.

Mr. Kevin Sorenson: The idea is to keep it fairly balanced, though.

Mr. Ian McCreary: That's right. The discounts in the program are for risk, administration, and the time value of money—which are legitimate costs. The idea is that over time it's an actuarially sound, balanced avenue.

Mr. Kevin Sorenson: So is there a large fund now?

Mr. Ian McCreary: Well, as I say, right now it would have some instruments in it as opposed to cash. There would still be a number of offsetting futures positions that would not be fully lifted until the sales program is complete. So whether the number is large or small depends on how the lifting of those market instruments works through the rest of the pool year. I don't really have a financial number.

Looking forward, I think it's a fair projection that the basis position has narrowed, as reflected in our current basis. That indicates that you would anticipate seeing zero to the positive side of the ledger.

Mr. Kevin Sorenson: Some of the things—

The Chair: Kevin, I'm sorry, you're over a minute.

But you were looking for a value on this contingency fund. I didn't really hear a value offered, in terms of product or dollars.

Ian, do you have a value for it?

• 1025

Mr. Ian McCreary: No. We wouldn't have a value until the pool accounts closed, at which time we anticipate there would be an actual value. But now, all the transactions are incomplete. The second half to those transactions is clearing them with the pool accounts. That determines the values.

Mr. Ken Ritter: I'm thinking, sir, it would be in our annual report then, when those pooling accounts close.

Mr. Kevin Sorenson: So you wouldn't know the amounts you're holding in your hedges and futures. When everything closes, then we know.

Mr. Ian McCreary: Right. We would have that information. We wouldn't have it in terms of all the different positions, but when it closed, we would know where it finished.

The Chair: Would you provide that to the committee? You know that in bookkeeping everything has a value.

If you could get that back—Kevin, would that satisfy you?

Mr. Kevin Sorenson: I'd love it, but I don't expect to get it.

The Chair: It has to be in the system somewhere.

Mr. Ian McCreary: I anticipate it would be in our annual report, which is available to Parliament.

The Chair: Dick, you had a short question.

Mr. Dick Proctor: Just a very short question, thanks, Mr. Chair.

Going back to the spring cash advance program, aside from the difficulty with the forms, how much interest is there among producers for this program? People sometimes say one thing and do something else. But in meetings at our end last month, a lot of folks said, “I'm not going to take advantage of that. Sure, everybody likes interest-free money, but it's just one more debt that I'll eventually have to repay.” What's your sense?

Mr. Ken Ritter: Can I clear up one point first? Our staff indicated that the forms are not a problem for the federal government. The forms were printed last week, with a commitment that they would be delivered to all rural communities no later than today.

As for the percentage of use—Mike, do you know that?

Mr. Micheal Halyk: The areas that would use the programs would probably correlate directly with the areas in the tightest financial positions—areas that saw extreme weather problems last year, which dropped the value of their crops. These people are in some fairly tight financial positions.

But I think it would be impossible for us to put an estimate on the percentage of use. We hear the same thing: people would rather not use it. But by the same token, I'm seeing some interest, and certainly our 1-800 phone line has. There are people interested in the program.

Mr. Ken Ritter: A further comment: use has gone up significantly from where it was a couple of years ago.

The Chair: Our hour and a half is nearly finished.

Claude, you have a...

[Translation]

Mr. Claude Duplain (Portneuf, Lib.): I would like to ask a brief question. Let us take an approach or a vision which is a little more futurist. We know that people are concerned with GMOs at this time, with the issue of transparency on everything we eat or buy. As there are no transgenic varieties of barley or wheat at the present time, in the event it would be feasible, do you have or are you developing any plan which would enable to segregate transgenic grain varieties from traditional ones?

[English]

Mr. Micheal Halyk: We have said in our statement that there are two issues that concern GMOs or biotechnology. If GMO wheats are to be looked at in Canada, market acceptability has to be one of the issues. The other issue is the ability to keep that product separate within our handling and transportation system.

We've asked the government to insist that those two points be placed in the criteria for looking at GMO wheats. I think if those two are met, then Canada should be comfortable in maintaining its ongoing excellence as a marketer of choice.

The Chair: Thank you, Claude.

Mr. Ken Ritter: Could I have about three minutes to address and sum up a couple of things?

The Chair: Yes, but before you do, maybe I'll just make an observation.

When you talk about financial pressure and subsidies, one paragraph on page 3 concludes by saying:

Any reductions in subsidization by these two competitors,

—of course, that's the Americans and the European Community—

as a result of the current WTO round of discussions, won't have an effect on the current market reality for at least five to seven years.

That would also mean that if we attempted to match these subsidies, it probably wouldn't...

• 1030

So, Ken, in your concluding remarks, could you reflect on that? That's a major factor in terms of people coming to government and looking for...

Mr. Ken Ritter: Larry will answer that for you.

Mr. Larry Hill: When it comes to negotiations on the subsidies, what usually happens is that there's a phase-out period. I think the last round took many years to phase out. That's what this means: that production will be distorted in subsidizing countries until these things have phased out.

If subsidies were increased in Canada and producers received the money, they would get the money right away in terms of a subsidy. So there's a difference in timing of effects there.

The Chair: Thanks. Your summary, Ken?

Mr. Ken Ritter: I just want to recap a couple of issues—I think some comments were left unsaid.

First of all, I want members of this committee to appreciate the fact that western Canadian grain producers have a competitive advantage: we're the most efficient producers in the world. We're not talking about some industry that wants welfare—we're as efficient, well-developed, and market-oriented as the lumber industry, for example. I think we should always recognize that in terms of wheat alone, this industry benefits Canada to the tune of $3.8 billion.

The second issue I want to comment on is the voters list Mr. Hilstrom mentioned. We get the information for the voters list from the permit book. There's a lot of commercial sensitivity around that kind of information. We feel strongly that although the candidates have that voters list during the election campaign, after it's concluded they should return it.

We went through the exercise of analysing how we could develop that list better. We found it would be so extremely costly that we felt it wasn't a reasonable expenditure to develop a list through an enumeration process.

The third issue I want to mention, Mr. Hilstrom, is your auction market analogy. That's a good analogy. But I think there's a good answer to it, too. My dad used to be a cattle buyer. He bought cattle right in our area, Kevin, and he shipped them to the final consumers in Ontario.

That happens in the grain market too: the ultimate buyers are overseas customers, and there are 200 of them in 70 countries. They're the real bidders. The only thing I'd ever do as an individual farmer would be to allow an elevator company to be a middleman and skim off the grain.

So I say, add up the numbers. Does the board do a better job? In my judgment, the answer is, yes, it does.

Mr. Howard Hilstrom: Mr. Chairman, just one question. It was brought up and I think it's important.

You're doing this benchmark exercise and comparing the Wheat Board to the private industry. Is that not a terrible waste of money? Why don't you just do a benchmark exercise on how to make the Wheat Board perform to its maximum? Forget about private enterprise. You're working under regulation right now. Do that, and do the best job you can.

If you want to see whether farmers would go for the private market or the Wheat Board, then just give the exemptions—you're allowed to give exemptions. You could exempt the organic growers. You could give any farmer an exemption to export and market his own wheat.

That would be the real choice. Do you believe it's a waste of money to be looking at private enterprise versus the Wheat Board?

The Chair: We're out of time, Howard.

Mr. Howard Hilstrom: Well, that's a good question.

The Chair: It's a good question, but our time is up. We have to abide by the rules we've set at the beginning.

Mr. Howard Hilstrom: We're on until 11 o'clock—I'm sure he's got two minutes to answer that.

The Chair: No, no. I said, as chair, that we had an hour and thirty minutes. We've gone an hour and thirty-five.

With that, as the members of the Wheat Board can see, we do have a controversy. I guess you have it back home, as big as we have it here on the Hill. But it's a matter that has been decided by the Canadian government. Until that government changes, I suppose we'll have the system we have now, Howard.

So thank you for coming.

Mr. Ken Ritter: Thank you, Mr. Chairman.

• 1035

The Chair: We now have, Larry, if we could...

Mr. Murray Calder: They're getting away on you, Mr. Chairman.

The Chair: Well, it's easier to decide when they've gone. Could the meeting get back now to a couple of points? I would ask if the witnesses would please give us time to get back to our meeting.

Madam Tremblay, you have a brief point?

[Translation]

Ms. Suzanne Tremblay: On a point of order, Mr. Chairman. At the previous public meeting we had, where we had people from the department, I asked a question in order to know whether it was true that the Farm Credit Corporation offered loans to farmers at an interest rate which is 1 percent lower than the rate of the credit unions or of the National Bank?

Mr. Lagacé happened to answer this question and he told me that it was not the case. However, when I later went and talked to him , he told me that he had misinterpreted my question and confirmed that it was true that the Farm Credit Corporation sometimes gives loans at lower interest rates than those offered by the National Bank or by the credit unions, namely in Quebec . So I wanted to make this correction so set the record straight.

[English]

The Chair: We could come back to that later. I think it's the intention of our committee to have the FCC before us sometime soon. We certainly will note your comment this morning, but when Jacques comes back, we'll have an opportunity to inquire further on that.

I want to get to two points here this morning, a very minor one to begin with. Traditionally committees have had coffee and juice, and each meeting it's roughly a $48 cost to the House to support that part of our menu. I brought up only recently the suggestion that maybe we should try to support the agricultural community in some of our committee work here, and probably this is a good place to start, by looking for such things as milk, maybe a bit of yogurt, and some fresh fruit. The clerk informs us this would have to come out of our committee budget. We could maybe divert $50 or so at each meeting towards the people we're representing. For example, milk is $1 a glass. I don't know how many farmers would like to get $1 for about 7 or 8 ounces of milk.

• 1040

Mr. Howard Hilstrom: When we go over lunch hour we provide a lunch with yoghurt and milk and everything, but I think it's going past that for these hearings here. I think coffee is fine. If you want to put out hamburgers and that, the beef guys will be happy, I guess.

Mr. Larry McCormick: I think they would provide them.

Mr. Howard Hilstrom: That's poor reasoning, I think, Mr. Chairman.

Mr. Kevin Sorenson: What about the tobacco farmers?

Mr. Rick Borotsik: I think the status quo is good enough for the particular circumstance. Yoghurt and milk can perhaps be used when we do have lunch, but I don't think in this case it's necessary. If that's the case, you can get into bagels and muffins and all the rest of it, and I think we go a little overboard then.

Mr. Murray Calder: Don't forget chicken fingers.

Mr. Rick Borotsik: Well, the chicken fingers are tough to justify, but I'm sure bagels and muffins would be different. With the wheat prices and the grain prices now, it'd be nice to be able to assist them. But I don't think it's necessary, Mr. Chairman.

The Chair: Okay we've heard from—

[Translation]

Ms. Suzanne Tremblay: I would also like to have some hot water for tea. I always bring my tea bags but I do not have any hot water.

[English]

Mr. Murray Calder: We're in hot water.

Mr. Howard Hilstrom: Mr. Chairman, we let the Canadian Wheat Board go, and they've got a lot of important stuff for us to discuss here. These reporters are going to slaughter us for spending 20 minutes on this.

The Chair: Well, I'm not sure, Howard, it's 20 minutes. It's a brief comment, but you'll note that in some places where the House meets milk is supplied instead of coffee. Since it started about a year ago, there has been a big demand from people wanting, for example, 2% milk, rather than having a bit of hyper here with coffee. But if you're satisfied with what we have, so be it.

The main point of this 20 minutes, Howard, is to deal with the request from the agricultural attaché here, indicating that in Quebec City there will be representatives from Texas, North Carolina, Alabama, Pennsylvania, and Florida coming here to meet that weekend. A request has come in for us to meet with them to discuss, I guess, basic agricultural issues in the context of free trade.

Now, Howard, it's also my understanding—I will get to you in a moment there—that your party doesn't favour any travel. When the request was offered to me, I had to immediately react and say this would be a problem, because the Alliance, through the liaison committee, will not permit committees to travel. So if we decided otherwise and we had support, we would have to get to a meeting this afternoon and draw a budget. But it's highly unlikely that there's going to be a change in the position of the Alliance Party.

Might I suggest to the committee—and I do see some hands here—that we might have an opportunity to meet as individual members, rather than as a committee. The clerk, of course, would probably be unable to help us very much with individual members going to Quebec City, but if, individually, we felt it was important to us as members of Parliament, we might arrange, within our office budgets, to go there and meet briefly with the American representatives.

Now I'll go to Suzanne.

[Translation]

Ms. Suzanne Tremblay: You talked briefly about the states which will be represented. You mentioned Texas, Alabama, Florida and North Carolina. Are there some others? You presume that the people from the Canadian Alliance will not permit us to travel to Quebec City. But were they asked?

[English]

The Chair: In the House liaison committee the subject did come up and the statement was made by their representative that the Alliance Party would not be involved in any travel until certain changes were made in how committees operated. Maybe Howard could tell us more.

Mr. Howard Hilstrom: I'd simply state that the House leaders of all the parties discuss those issues, and I don't think I'm about to start discussing them in committee here. I think certainly, as individual members, we could travel down to Quebec City and meet with these representatives for an afternoon or an evening, whatever's available. We just need to know the dates and set the meeting date. This is part of our parliamentary work as MPs, so we could do that.

• 1045

The Chair: Suzanne, further to your question, the chairman is Larry Combest, from Texas.

Mr. Larry McCormick: We met him last year.

The Chair: The ranking minority member is Charlie Stenholm, from Texas. There's a representative from North Carolina, Eva Clayton; Earl Hilliard, from Alabama; Tim Holden, from Pennsylvania; Adam Putnam, from Florida; and Philip English, who represents the ways and means committee of the House of Representatives.

Larry, to you, then.

Mr. Larry McCormick: Mr. Chair, I'm not sure we're going to be able to have an official standing committee meeting in Quebec City unless we travel officially. I doubt if the House will recognize it. And of course, there may be some minor disruptions in Quebec City, according to the press and Dick.

Some hon. members: Oh, oh!

Mr. Larry McCormick: I didn't say any last names.

No, actually, Mr. Chair, I'm just wondering why we couldn't meet with these people on the following day, on the Monday, perhaps—April 23—as they're on their way back to Washington. I think it's very important to meet with these... right here in Ottawa. I would think they could stop in and we could meet with them officially.

I put forward from the last meeting that we do travel to Washington later this year.

The Chair: To answer those two questions, first, apparently they're travelling by charter with a larger group. The second answer they gave was that they were not available on Monday.

The Clerk: No, I asked them. They cannot come to Ottawa.

The Chair: Merci. So it's either Friday, Saturday, or Sunday—

[Translation]

[Editor's note: Inaudible]

Ms. Suzanne Tremblay: —

The Clerk: They cannot come on Monday in Ottawa.

Ms. Suzanne Tremblay: And when do they propose to meet us?

The Clerk: They propose that we go there, but there is a problem.

[English]

There is the accommodation problem also. Security people would be needed.

[Translation]

Ms. Suzanne Tremblay: At what time do they want to meet us?

The Clerk: It has not yet been determined.

Ms. Suzanne Tremblay: But it would be while they would be there, on the 21 or the 22?

The Clerk: Yes.

[English]

Mr. Larry McCormick: Mr. Chair, unless we go there officially as a standing committee we wouldn't have translation available. Again, we just wouldn't be an official committee. It would be great to meet with them. I'd like to meet with them, but...

The Chair: Rick.

Mr. Rick Borotsik: I was going to ask the same question as Larry, whether there was a possibility of having them come to Ottawa any time that weekend, perhaps the Saturday or Sunday. I got my answer, that it's impossible. We met these people, Mr. Chairman, in Washington. I believe we should have them visit us in Ottawa at some time in the not too distant future.

By the way, I have some difficulties going with individual members to meet with this particular organization. If we go, I believe we should go as a committee, not just simply as individuals. If you're asking if we can fly to Quebec City on our own, with our own points, we can do that. But I think it has to be an official meeting of this committee when we get there. It has to be a committee meeting with those representatives.

The other issue is, if we can't do it, could we extend an invitation to those same people—Mr. Combest and his committee—to come and visit us here in Ottawa on an official visit? We did the same in Washington; I would like to be able to extend that invitation to them to come here. And vice-versa—I know Larry wants to go back to Washington. And I agree with him; we learned an awful lot when we met with them.

Could we extend an official invitation to have them come at some other time here? Or if we go, Mr. Chairman, we'd better all go; we'd better pay our own way, and we'd better have an official meeting of all members of this committee with the organization.

An hon. member: Now we don't even know when we can meet them. Is that correct?

The Chair: Howard.

Mr. Howard Hilstrom: I would just point out that both Rick and I were down to Seattle. Of course, we don't expect to see the same thing as happened in Seattle, in terms of riots and that kind of thing, but it's a pretty harried experience there with the amount of work the various people there are doing, and I don't know if it's exactly the right time to be trying to meet with a delegation like that. I appreciate there are several of them in there together, but I think our work with the Americans could be done at a different time rather than trying to jam up this whole agenda that is no doubt there.

Mr. Rick Borotsik: But we should meet with them.

• 1050

Mr. Howard Hilstrom: We should meet with them, I agree.

[Translation]

Mr. Claude Duplain: Does not the request to meet us come from them?

Des voix: It does.

Mr. Claude Duplain: If they asked to meet us, it means that they have time to do so.

Ms. Suzanne Tremblay: Yes.

Mr. Claude Duplain: I am new here. With respect, I do not understand what prevents us from travelling to meet them.

Ms. Suzanne Tremblay: They will not permit the committee to travel because they were not allotted ten minutes to speak at the beginning of the question period.

Mr. Claude Duplain: You do not want to travel because you did not get a ten minute period?

Ms. Suzanne Tremblay: Exactly.

Mr. Claude Duplain: Are we in kindergarten or in government?

[English]

An hon. member: The Alliance have—

Mr. Howard Hilstrom: In Parliament, there's Shawinigate, and there's a lot of activity. There's fraud and theft on the part of the people who receive moneys in the Prime Minister's riding. I think there are bigger issues in this Parliament that the House leaders are dealing with that none of us here know about, and I think that's what's happened.

The Chair: Let's get back to the issue at hand.

Suzanne.

[Translation]

Ms. Suzanne Tremblay: Given that the request comes from them, I wonder what can be the political impact of a refusal from the Standing Committee on Agriculture to meet the U.S. representatives, when we know very well that in the negotiations on the FTAA, agriculture will get it in the neck and that it will still be at the centre of the debate in the new round of the WTO talks? How can we, as Canadian members of Parliament, because of a simple conflict on another issue, shirk our responsibilities as men and women who are elected? I wonder if our constituents would be pleased to hear that individual concerns are put before the public interest.

Mr. Claude Duplain: I would also add the following: how could I explain to my constituents that, because of a controversy over a ten minute period, a delegation will not go to meet the U.S. representatives? There are so many problems to deal with, so many thing to be discussed, and our concerns about the future are well known. I am not as radical as Ms. Tremblay, but I do think...

Ms. Suzanne Tremblay: It is a matter of personality.

Mr. Claude Duplain: ...that it is extremely important to meet the U.S. delegation. We have too many questions not to do so. If, unfortunately, we do not meet them, I would be in favour of Rick's proposal, but I think it would be better to go to Quebec City.

[English]

Mr. Larry McCormick: Shame on the Alliance.

The Chair: In order for the committee to go as a committee, as I mentioned earlier, we would have to have a motion today, and this afternoon I would have to go before the liaison committee to request money to do this. Now, we have not had a motion to do that, unless I am hearing one.

Larry.

Mr. Larry McCormick: On a point of order, Mr. Chairman.

I think I hear, Mr. Chair—I hope I hear—from all parties here that it is important. We've met with these people before. We've met with the chair of that committee, Larry from Texas, and since we're not allowed to travel out of the country—perhaps because of the opposition party—I would make a motion that we do meet with these people wherever we can and have... it will probably be at a time of day when we can get in and out of town, because the hotels will be full.

I make a formal motion that we do meet with this committee from the United States.

Mr. Murray Calder: Formally, as a committee.

Mr. Larry McCormick: Yes. Do I have a seconder for my motion?

The Chair: If there's a seconder, then—

Mr. Larry McCormick: Yes, and all parties have a recorded vote on this motion, please.

Mr. Howard Hilstrom: I have a point of order.

The Chair: I have two points. One from Suzanne, and then from Howard.

Ms. Suzanne Tremblay: No, it's okay.

Mr. Howard Hilstrom: I'm not going to sit here and be maligned by these Liberals and... I'm not going to have my reputation and the reputation of my party maligned by these—

Mr. Larry McCormick: I never mentioned your name.

Mr. Howard Hilstrom: Mr. Chairman, I'm speaking and I have the floor, I believe. Is that true?

The Chair: No, I'm not sure, Howard, that this is a point of order.

Mr. Howard Hilstrom: Well, it's a point of privilege. I'd like to point out, Mr. Speaker, that it is not a question only of having the committee decide that travel goes. The rules of the House allow for this committee, and you as a chairman, to go into the Parliament as a whole—

Mr. Larry McCormick: Is the Alliance interested in agriculture or not?

Mr. Howard Hilstrom: —and have this debated in the House and get authority from the House, where the the Liberal members hold the majority—

An hon. member: Well, Larry, just—

Mr. Howard Hilstrom: Just let me speak. The majority is held by the Liberals, and this committee can travel by going to the House and explaining what we're going to do and why.

And Mr. Chairman, I will not accept being maligned for not allowing travel.

• 1055

The Chair: Just a second.

Mr. Howard Hilstrom: I'd like a ruling on whether or not he's maligning me.

Mr. Larry McCormick: Mr. Chair, if anyone accuses me like that... I never mentioned the honourable member's name. It's unfortunate that his leader is not in favour of what we're trying to do by talking to the people here in Canada, but certainly I recognize that the member is an excellent member of this committee.

An hon. member: Go talk to your House leader and solve it by telling him we want to travel.

The Chair: Let's hear from Suzanne and then we'll put the question. We only have five minutes before the next meeting.

[Translation]

Ms. Suzanne Tremblay: Mr. Chairman, I am going immediately to my leader's office to try to understand what is going on. Frankly, I do not feel sufficiently informed, frankly. I find this to be so serious that I am going immediately to try to see what is going on. I am still in favour of going to Quebec City, because otherwise, it would seem to me to be an utter lack of political sense. It is a matter which is at the centre of all the debates. We know how agriculture will be an issue in the debates during the negotiations towards the adoption of the FTAA and during the negotiations of the WTO. To refuse to meet this group of parliamentarians would constitute, I think, a serious breach of our responsibilities as men and women who are elected.

[English]

The Chair: Larry, just a second, Rick is next.

Mr. Rick Borotsik: I don't know any of the details. Are they saying they can meet with us on the 21st and 22nd, or the 22nd?

The Chair: We don't have the date.

Mr. Rick Borotsik: So we are dealing in a vacuum here right now. We don't know the dates. We don't know how long. We don't know what the agenda is. I think we should have some more information before we even vote on this motion, to be perfectly honest. We know they can't come to Ottawa. Are there other options as to where we can meet this group of individuals? Could it be in Toronto? Are they stopping over there? There's so much non-information. Simply to say we're going to go to Quebec City and meet with them, personally, I don't know if I can make it. I don't know if Howard can make it. I don't know if Dick can make it.

Mr. Dick Proctor: I'll be there.

The Chair: Are we ready for the motion?

Mr. Rick Borotsik: What's the motion, that we're all going to go?

The Chair: The motion is that the committee will be organized to go to Quebec City to meet with the American representatives when they come to the summit.

Mr. Rick Borotsik: We don't know when. We don't know where.

An hon. member: We'll be there.

Mr. Larry McCormick: Let's call the vote.

The Chair: That's our job to do. Are you ready for the question?

(Motion agreed to)

The Chair: Now with this, just to clarify what will happen, between now and the meeting time this afternoon the clerk will prepare a budget. We'll go to the liaison committee and request funding to have a committee meeting with the American representatives in Quebec City. We'll inform you of the outcome of that request later today.

With that, we'd like to adjourn the meeting.