[Recorded by Electronic Apparatus]
Wednesday, March 19, 1997
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[English]
The Chairman (Lyle Vanclief (Prince Edward - Hastings, Lib.)): Order.
Our presenters this morning are: the Canadian Registered Organic Producers Marketing Co-operative, Citizens Concerned About Free Trade, and Saskatchewan Concerned Farmers Saving the Wheat Board.
You have all been told by the clerk that you have 15 minutes to make your presentation, after which we will have about 40 to 45 minutes of dialogue back and forth between you and the members. As you approach the last couple of minutes, I will somehow indicate that to you. If you go over the time, we will have to take action. Everybody in the last three days has been very cooperative about keeping within the time limit, in fairness to everyone. If you haven't reached your critical points when I signal to you, please go quickly and directly to them.
The first to present to us will be, from the Canadian Registered Organic Producers Marketing Co-operative, Mr. Walter Nisbet.
Please go ahead, Mr. Nisbet.
Mr. Walter Nisbet (Chairman, Canadian Registered Organic Producers Marketing Co-operative Ltd.): Thank you.
First I'd like to introduce the person with me, Ken DeMong, one of our board members. I am chairman of the Canadian Registered Organic Producers Marketing Co-operative. We appreciate the opportunity to present our views on Bill C-72, an act to amend the Canadian Wheat Board Act.
As our name indicates, we are in the business of marketing organic products, mainly wheat, durum, rye, oats and flax. We are staunch supporters of the Canadian Wheat Board system of single-desk selling, price pooling, and government financial guarantees. We want to see the Canadian Wheat Board strengthened in these areas, and we support amendments that will support these principles.
The Canadian Wheat Board presently provides reasonably equitable treatment of all producers in the area to obtain the best possible price, with equal opportunity for deliveries and government guarantees, borrowings and credit sales.
In the short time we have available we cannot comment on all the proposed amendments. However, we would like to outline what we believe would be the consequence of some of the amendments, and to offer some recommendations.
In terms of clause 3, the proposed board of directors, only partly elected from among farmers, would provide an illusion of control, when in reality the Governor in Council would have the real power. It would seem that the main element is to be a change from a crown corporation to a mixed identity. The clause does not provide enough detail. It is vague and would be impossible to cover in the regulations. This clause is not acceptable.
In clause 6, a contingency fund, which would likely be made up by deductions on producer sales, would be a hard sell in light of the present declining prices, the elimination of the Crow benefit, and escalating grain transportation costs. Since historically there has been a limited use of government guarantee, the main reason for the contingency fund would seem to be to cover potential loses from cash purchases.
If this is the reason, this then brings unfair pricing into the picture. If the Canadian Wheat Board pays producers too much for a cash purchase, then the producers would have to make up the difference from the contingency fund. This is not acceptable.
In terms of clauses 15 and 16, to make cash purchases and terminate pool accounts at any time further erodes the equity among producers.
Let me explain. In a down market, a producer might want to get a cash price, expecting that the price would be lower later in the year. As well, if a pool account was shorter than the one year in a down market, those producers marketing in the early pool would have a price advantage. This is unacceptable. Also, the yearly price-pooling for equity would be destroyed.
About clause 19, the Governor in Council could negotiate a producer certificate and allow transfer and assignment of certificates. Again, this would destroy equity among producers. Producers in need of cash would seek a cash settlement that would tend to depress the price. Hence those producers most in need would receive a lower price than those who could hold for later. This is not acceptable.
Clause 20 would allow the proposed corporation to enter into contracts at a price different than others. This would destroy producer equity. It seems there would be no need for this clause if the CWB had control over all the grain.
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Clause 22 allows the Governor in Council to exclude any class of grain and any area. This is not acceptable. If any grain is split off so that the Canadian Wheat Board does not handle it all, it means dual marketing. The minister has said this is not practical, and we agree, as impracticality was the case when dual marketing was tried with the barley market. There is no provision to allow any expansion of the Canadian Wheat Board to include other grains.
As for utilizing modern risk-management tools in dealing with customers, it is presumed part of that would involve hedging. How could the whole of the Canadian crop be hedged without depressing the market price? How can hedging and price pooling exist together? This was a recommendation of the review panel. The review panel was discredited for different reasons by all sides in the debate. Now, the result of many of the proposed amendments will bring into effect many of the recommendations of the panel.
The present Canadian Wheat Board Act provides for five commissioners. There are presently three holding office, and there are two vacant positions. The three commissioners were appointed by the previous Conservative government. There have been no appointments made to CWB by the present Liberal government. Why have there not been appointments to fill these positions? What does this mean? Has there been a plan to reduce the Canadian Wheat Board? What will be the attitude of the candidates in the upcoming election?
I'll now give you some recommendations.
For our organic grain, and indeed all grain, it is important that the Canadian Wheat Board have control over marketing of all of each class and kind of grain. The blending and bulk shipments that the Canadian Wheat Board can provide to our organic customers are very important for our consistent product.
Studies have shown that the Canadian Wheat Board brought higher returns for farmers than did a non-board market. We therefore recommend that all grains - wheat, durum, barley, oats, rye, flax and canola - be included in the Canadian Wheat Board mandate.
Historically, government financial guarantees have contributed to lower Canadian Wheat Board borrowing interest rates, with low government involvement. Government financial guarantees should continue.
Equity among producers is important - price equity and delivery equity. The interest-free cash advance is the best way to provide equity, since producers holding grain that is not in demand can use the cash advance to take pressure off the need to deliver early in the crop year. Again, a pool period of the full crop year ensures the best price fairness to all producers.
We can support the use of mobile elevators and deliveries to condo grain storage; however, we should also use producer car loading.
The use of hedging allows businesses other than farmers to siphon off grain income from farmers and to other segments of the economy. We recommend that this not be used.
If there is a reasonable concern about the farmers having more control over the Canadian Wheat Board, we then recommend to continue the Canadian Wheat Board Advisory Committee, while giving it some power. We agree with the present method of governance, so we recommend that the three vacant commissioner positions be filled so that the CWB can get on with the duty of selling our grain.
Thank you.
The Chairman: Thank you very much for your brief but to-the-point comments, Mr. Nisbet.
We will now go to the Citizens Concerned About Free Trade.
Mr. Orchard, welcome to the committee.
Mr. David Orchard (Chairman, Citizens Concerned About Free Trade): Thank you very much.
I farm at Borden, Saskatchewan. I've been the chair of Citizens Concerned About Free Trade since 1985. It is a national, non-partisan organization that was set up to fight Mr. Mulroney and his free trade deal. I've also written a book, called The Fight for Canada, on the Canada-U.S. free trade deal and NAFTA.
In looking over this legislation, there is really one clause that stands out among all others. In my view, it's the most significant one. It is proposed section 61.1, under the title ``Implementation of the North American Free Trade Agreement''.
Proposed subsection 61.1(1) of the bill says:
In exercising its powers and performing its duties, the Corporation shall give effect to those provisions of the Agreement that pertain to the Corporation.
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Proposed section 61.1(2) says:
- The Governor in Council may, on the recommendation of the Treasury Board and the
Minister...make such regulations in relation to the Corporation
- - that's the Canadian Wheat Board -
- as the Governor in Council considers necessary for the purpose of implementing any provision
of the Agreement
- - that's NAFTA -
- that pertains to the Corporation.
Let's look back at why the Wheat Board was set up. It was set up in 1935 as a result of pressure from farmers marching in the streets of Regina to get some measure of protection from the power of the private grain companies. The price of wheat was a few cents a bushel. The private grain companies were notorious for short-changing on weights and grades. You could haul grain all day to the elevator and after the freight was deducted end up with virtually nothing.
The private grain companies were outraged by the implementation of the Canadian Wheat Board. They made thundering speeches across the prairies for 20 years condemning the board as a socialistic, communistic plot, but it didn't sway the widespread support for the board by the government of the day or by farmers.
By all criteria the Wheat Board has been an outstanding success. It has smoothed out wildly fluctuating prices. It put a measure of stability into the lives of farmers and the economies of all three prairie provinces, in each of which, including Alberta, agriculture is by far and away the largest industry.
Even more significantly, in a country with the highest foreign ownership in the industrialized world, with over 95% of our automotive trade, over 90% of our energy, our oil and gas, almost all of our major farm machinery manufacturers, all of our tobacco, 97% of our movie industry foreign owned, the grain industry stands out as an exception. It is still 70% in Canadian hands, and the reason for that is because we have the Canadian Wheat Board.
The Canadian Wheat Board has become an extremely effective competitor. American author Dan Morgan, in his major study of the grain trade, called Merchants of Grain, called the Canadian Wheat Board the most powerful and prestigious marketing board in the world and said that it has earned a reputation around the world for high quality, reliability and high prices to farmers.
Because the Wheat Board is not a private company, it doesn't extract profit, but it returns all of the money it receives from the sale of farmers' wheat after extracting its cost of operation, which is a tiny figure of about 5¢ a bushel.
So we have an institution that is basically popular with farmers. It has prevented the foreign takeover of Canada's grain industry. It has an enviable reputation in Canada and around the world. It's financed by farmers themselves. It sells farmers' grain for a small cost and does not take a cent of profit.
So what is the problem? What is it that you are trying to fix with this legislation? What is broken? There is nothing broken. What there is is some objection to the Canadian Wheat Board by our major competitors in the United States, and so like a bunch of toads we've fallen on our knees and written this legislation.
Canada is supposed to be an independent country, and the Wheat Board has behaved as if that were in fact true. Not only has the board blocked U.S. grain companies from taking over the Canadian grain industry, but it has competed with them in the world market. Even more significantly, it has traded with countries without receiving the permission of the U.S. State Department. This includes countries such as China, Cuba and the former Soviet Union, among others.
Some of you will recall that after the huge board sale to the Soviet Union in 1963, Wisconsin Senator William Proxmire attacked the Canadian Wheat Board and Canada for what he said was ``an inexcusable case of trading with the enemy, for the enemy's benefit, in our cold war with the Soviet Union''. Senator Paul Douglas of Illinois called the sale ``a direct blow to U.S. foreign policy that damages our best hope of overthrowing Russia and China through revolution from within''. One month later President John Kennedy authorized U.S. grain companies to start trading with the Soviet Union.
It's exactly the same kind of hullabaloo we're seeing as the U.S. attacks Canada today for trading with Cuba while Havana is crawling with American businessmen attempting to sign contracts in that country.
So then came Brian Mulroney and free trade. Mulroney, before he was elected, told Canadians in 1983, that free trade was a danger to Canadian sovereignty and that we'd hear no more of it from him during the leadership campaign nor at any other time. Eight days after he was elected, he held his first press conference at Ronald Reagan's side and announced he'd be headed for free trade with the United States.
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Cargill Grain played a key role in the Canada-U.S. free trade negotiations. Cargill is the largest grain company in the world. The chief negotiator for agriculture on the U.S. side of those talks was a man named Daniel Amstutz, under-secretary for Agriculture in the United States and formerly chief executive officer of Cargill investor services. Advising the Canadian government on agricultural policy in the Canada-U.S. free trade talks was David Gilmore, vice-president of Cargill Grain Canada.
So Cargill Grain, the largest company in the world, had its interests represented on both sides at those talks. The main thing Cargill wanted was to get rid of the power of the Canadian Wheat Board.
Meanwhile, we were told that agriculture was not on the table in those talks. When I debated John Crosbie out in Vancouver, in the largest debate on free trade in B.C., he said agriculture was not on the table. When I debated international trade minister Bob Andrew here in Saskatoon in the largest debate in Canada on free trade, he said agriculture was not on the table. When we challenged John Wise and Charlie Mayer when they were ministers of agriculture, they said agriculture was not on the table in those talks. When we actually got to the Canada-U.S. free trade deal, it became the longest chapter in it.
We said in 100 meetings across Canada in that 1987-88 period that not only was agriculture on the table but also the major target was the Canadian Wheat Board, and in that 1988 election the majority voted against Mulroney and what he called his referendum on free trade. Because we have an antiquated first-past-the-post electoral system he got into power and imposed it, but the Liberals called it the ``sale of Canada act'', correctly.
Jean Chrétien's autobiography said he opposed free trade because we would be clobbered, and in 1993 the Liberal red book promised to renegotiate both the NAFTA and the FTA. One day after the 1993 election - it didn't take eight days, as with with Mulroney - Jean Chrétien got a phone call from Bill Clinton, and that night he capitulated and the Liberals announced that they were going to ratify the NAFTA, in place, without a single change made. There was not a single change made to the NAFTA that George Bush and Brian Mulroney had negotiated.
So we're seeing the implementation and all of the fallout. Canadian National Railway, our rail line company, sold for half price; it's 70% U.S.-owned now. The Port of Churchill and the rail lines in northern Manitoba sold to an American company. We're seeing the wholesale Americanization across this country as the fallout of the NAFTA agreement.
At a U.S. grain industry convention in 1996, the president of the National Association of Wheat Growers announced it wanted an end to the Canadian Wheat Board monopoly on export sales. Its president, Winston Wilson, said:
- One day we're going to have a North American wheat market. There's no way you're going to
stop that. It's going to happen, and we might as well get ready for it.
So that's exactly what we're seeing. In Canada, a tiny, noisy minority of truckers and brokers and a handful of farmers are helping the U.S. giants to break the Wheat Board. They're calling for ``liberty'' and trucking to the U.S. and getting tremendous publicity from the media, which has portrayed them as representing mainstream farmers.
In the political arena, the Reform Party, which is the mouthpiece of all things American and stands at about 8% of the popular support in this country, is leading the attack on the Canadian Wheat Board. In its intellectual cheerleader, Western Report magazine, Link Byfield wrote an editorial calling the Wheat Board thugs and saying that it's too good for them to be sentenced to life at hard labour on Baffin Island.
That is the kind of attack the board is under, but what is the government's reason for implementing this policy? Why have they capitulated? The government implementing legislation spells it right out. In your legislative summary, it says:
- In recent years, however, the role of the CWB has been increasingly questioned both by trading
competitors such as the U.S., on the grounds that it gives Canada an unfair trading advantage....
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In my book about the free trade deal, which each of you should read, by the way; it has become a best-seller - there is a chapter on the Avro Arrow.
The Chairman: Will you leave copies of that on the table for the committee?
Mr. Orchard: You already have one, Mr. Chairman. Ralph Ferguson did his best to educate the Liberal caucus, but I think he failed.
I have a chapter in my book about the Avro Arrow. When we built the world's fastest, most advanced jet interceptor, it was the only plane in the world capable of shooting down the American's top-secret U-2 spy plane. The Americans didn't like it, and they put pressure on the Diefenbaker government and he cancelled it. It was a competitor to Lockheed and Boeing, and the Americans didn't want that kind of competition. It was cancelled. Diefenbaker said it was too expensive. In fact, it was too good. But you can't call the Wheat Board too expensive, because farmers pay all of its costs.
So what's the bottom line here? What we're seeing is that in order for Cargill Grain, ConAgra and the other American giants to move in and dominate the Canadian industry, the Canadian Wheat Board has to be removed, exactly the same way as, for the private American health companies to get in here, we have to destroy medicare, which is what the Reform Party and Mr. Klein and the others are busy trying to do. We have a tiny minority of individuals hoping to make some extra cash by selling into the U.S. that are helping in that cause.
This government, in an abject and panicky attempt to appease that group, has written this legislation. To make doubly clear that the sweep of NAFTA and the FTA will be given free rein over the border, you've inserted this proposed section 61.1.
We see the Liberals implementing Brian Mulroney's ``sale of Canada act'', which you as a party promised to renegotiate or cancel in the 1993 election, and you were elected on that basis. You're driving a bulldozer over the sweat and tears of our parents and grandparents who fought to achieve the board.
What's going to happen if the Wheat Board is destroyed? The answer is as plain as the nose on your face. We're going to return to what existed before the board was in place. All we have to do is look at the oil industry or the auto industry. The U.S. grain companies will sweep in and take over our industry. Cargill Grain could eat the Canadian grain companies for breakfast.
Look what happened in flour milling. In a recent article I wrote in The Globe and Mail - I hope some of you saw it - the chief executive officer of Alberta Wheat Pool, Mr. Cummings, referred to what happened to flour milling. He said:
- From start to end, when the first major transaction happened, when an American company
bought one of the Canadian flour mills, until the point when virtually all the flour milling
industry in Canada was owned by foreign interests, was 15 months.
- That's how long it took them.
So leave the board alone. Take your hands off it completely. It's working well. The attacks we're experiencing are proof that it's working well.
My question is this: Is this government running Canada for the U.S. grain companies or for the citizens of Canada? This legislation is not for the farmers or citizens of this country.
This so-called crisis in the Canadian Wheat Board does not exist. It's manufactured, driven by corporations in the U.S. that are our competitors and by their foot soldiers here in Canada, the National Citizens' Coalition, from whom you are going to hear, and the Reform Party, and the so-called Farmers for Justice, who represent no one but themselves.
They call for transparency in the Wheat Board. Who is asking Cargill Grain for transparency? They'd get laughed out of the boardroom. These people are living in a dream world.
Instead of bringing all of our legislation in line with NAFTA, which is what the Liberals are doing, you should be cancelling NAFTA, instead of systematically dismantling this country and the infrastructure that holds it together. Whether it's rail or publishing or broadcasting or grain policies, we should not be making them compatible with NAFTA but getting out. Section 22.05 of NAFTA says Canada that can at any time get out of the free trade agreement without penalty and return to trading under the GATT rules.
Our former deputy chief negotiator at GATT, Mel Clark, said that Canada cannot continue as an independent nation if it remains in the FTA and NAFTA. That's what the Liberals understood under John Turner, and now, instead, you've essentially adopted Mulroney's policies.
The push now is for a common currency. There was a big conference in New York the other day calling for Mexico and Canada to drop their currencies and adopt the U.S. dollar as the common currency for North America as the next step of the NAFTA implementation. That's the kind of push we're seeing in terms of assimilating us right into the United States.
The Chairman: You have 30 seconds left.
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Mr. Orchard: Instead of terminating NAFTA, this government is casting it in stone, and casting in stone its grip over the Wheat Board and the entire agricultural sector of western Canada. You have no mandate whatsoever to do that. You were elected to get rid of Brian Mulroney's policies, not to implement them.
Thank you.
Voices: Hear, hear!
The Chairman: Thank you very much, Mr. Orchard, for your presentation.
We will now go on to the Saskatchewan Concerned Farmers Saving the Wheat Board.
Mr. Ray Ryland (Member, Saskatchewan Concerned Farmers Saving the Wheat Board): Thank you, Mr. Chairman. With me today are John Lloyd, Marvin White and George Siemens.
The Saskatchewan Concerned Farmers Saving the Wheat Board is a group of farmers who came together in July 1996 following the release of the report of the Western Grain Marketing Panel. At that time it appeared to us as if many forces were lined up against the Canadian Wheat Board, and if farmers did not speak up, we risked losing the benefits of single-desk selling and price pooling.
First two farmers and then about forty came together to discuss how we might get our voice heard on behalf of farmers who wanted to retain single-desk selling and price pooling. The result was a rally in Rosetown on August 14, 1996, attended by about 1,500 farmers, to express their support for the Canadian Wheat Board.
Our group is a single-issue group that has no other involvement than to work for the retention of the benefits of single-desk selling and price pooling. We are farmers who produce wheat, durum, and barley, which are marketed through the Canadian Wheat Board, but we also produce livestock and many other crops that are sold outside of the Canadian Wheat Board.
The farmers who are part of our group and many of the farmers we talked to are very satisfied with the Wheat Board and how it's operated in recent years. Governor in Council-appointed commissioners, Government of Canada-guaranteed initial and adjustment payments, and Government of Canada rate of financing have served farmers well.
Many of us view the Canadian Wheat Board as an extension of our farms. The profits associated with marketing our grain are returned to us in much the same way as if we owned a marketing company or a food processing company. However, over the last several years it seems a few farmers and non-farmers have concluded that the Wheat Board must change. We support and endorse change, but we believe change should result in improvement and not just be change for the sake of change.
Bill C-72, an act to amend the Canadian Wheat Board Act, causes us some concern, although we do not disagree with many of the stated objectives of the bill. As we understand the bill, it appears to shift the risk of the Wheat Board to farmers while retaining most or all of the authority in the hands of the Governor in Council or the minister. Accordingly, we will address three components of the bill - namely, governance, the contingency fund, and pooling period.
First, in the area of governance, if the Canadian Wheat Board is to be managed by a board of directors, farmers need more specifics before the existing structure is abandoned. Proposed section 3.6 provides for the election of directors by producers, but seems to limit their responsibility by excluding them from decisions related to the selection of both the chairman and the president.
Farmer-elected directors should at least be a majority of the directors and the directors themselves should have the authority to select the chairman, a vice-chairman, and the president or chief executive officer. Furthermore, a producer-elected director should be responsible to producers and should not hold office ``during pleasure'', as is suggested by proposed sections 3.6 and 3.2.
Also, the producer-elected directors should be elected on a regional basis to ensure that producers in all areas of the designated Canadian Wheat Board area are represented. Producer-elected directors should all be elected in 1998, with varying terms so as to ensure continuity of directors in subsequent elections. Once in place, the board of directors should be required to meet at least 10 times per year.
The directors should be in a position to provide general guidance to the president regarding marketing and senior staffing of the Canadian Wheat Board. If a board of directors is to be effective and responsible, they must be actively involved in the direction of the Canadian Wheat Board. If the directors are not active, they will be neither effective nor able to be accountable to the farmers for the work of the Canadian Wheat Board.
It would appear that much of the detail of the creation and operation of the new Canadian Wheat Board is being left for regulations and for subsequent decisions of the current or future minister. This leaves farmers with much uncertainty and with considerable apprehension.
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Now let us comment on the matter of the creation of a contingency fund. Clause 6 provides for the creation of a fund to guarantee adjustment and initial payments and to provide for potential losses from operations.
First, it seems to us that the Government of Canada should continue to guarantee adjustment payments and losses from operations, since the Government of Canada proposes to retain effective control of the Canadian Wheat Board. However, if government is intent on shifting both authority and liability to farmers, then farmers are entitled to know the implications of a producer-funded contingency fund.
A producer-funded contingency fund will draw potentially large sums of money out of the hands of current farmers. There is no indication that farmers will be individually credited for their contribution to that fund. There is also no indication of how the fund would be distributed in the event that the fund were to be dissolved at a future date.
Historically the need for such a fund has been minimal. The government suggests the reason for creating the fund is so the Wheat Board will be able to make earlier decisions regarding adjustment payments. We believe if farmers were given the choice between a delay of a few days in making adjustment payments and having ongoing deductions from the sale of their grain, most farmers would opt for a few days' delay.
From the farmers' perspective, the fund may not be necessary. But if the fund is in fact deemed necessary, then farmers are deserving of more specific answers regarding the creation and ongoing operation of the fund. In fact we believe the real reason for the fund is to remove a contingent liability from the government by creating an unnecessary hardship on farmers. It is just one more example of change being both costly for farmers and of limited potential benefit for government.
Many of the remaining changes contained in Bill C-72 appear to us to be operational in nature and designed to update the Canadian Wheat Board Act to correspond with many current practices. As we said earlier, our group supports single-desk selling and price pooling, because we believe that together those two practices financially reward farmers. For that reason we are apprehensive about cash purchases, which bypass the regular marketing pools.
Clause 16 would allow for a pool period to be shorter than 12 months. Although this is a fundamental change in the traditional concept of farmers pooling the returns from one crop year, we recognize that at times a 12-month pool limits the ability of the Wheat Board to maximize returns for farmers. We therefore accept the intent of Bill C-72 to provide greater flexibility in the operation of pool periods.
However, the need for shorter periods may be minimized if farmers are obliged to fulfil the commitments they make on marketing contracts. We are also concerned that increasing the number of pooling periods will also increase the administration costs, which farmers must pay. We therefore hope that shorter pooling periods, if implemented, will be used infrequently by the Canadian Wheat Board.
At the same time as greater flexibility is being provided to enable the Wheat Board to better satisfy the needs of both customers and producers, the Wheat Board should be able to more rigorously enforce commitments made to it by farmers. When one farmer does not fulfil commitments made to the marketing agency, all farmers suffer the financial consequences.
Therefore the Wheat Board should be provided with both the tools and the instructions to enforce commitments to it in a manner that more closely mirrors commercial transactions between farmers and grain dealers. Penalties for failure to comply should be higher than at present and the penalties should be enforceable and enforced.
In conclusion, we wish to thank the standing committee for giving us this opportunity to appear and for travelling to Saskatchewan to make our appearance more convenient. As we said in the beginning, we support the practice of marketing our grain through a single-desk seller and of using the tool of price pooling.
We encourage the committee to proceed with dealing with Bill C-72 as quickly as is practical so the uncertainty of the last several years can be put to rest. Most farmers will adapt to whatever change is thrust upon them, but the unrest and polarization of recent years has been unproductive for all.
Thank you very much.
The Chairman: Thank you very much, Mr. Ryland, for another clear and concise presentation.
We will now go to questions and comments by the members, beginning with Mr. Calder and then Mr. Hermanson.
Mr. Murray Calder (Wellington - Grey - Dufferin - Simcoe, Lib.): Thank you very much, Mr. Chairman.
David, I don't know whether you remember me or not, but we've met on two different occasions. I want to clarify my position before I respond to what you had to say.
I am a chicken farmer from Ontario, and I'm a very strong supporter of supply management, because we market 350,000 chickens a year.
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When NAFTA came in, it presented a very difficult situation for us. When you take a look at what happened last year, though, it has really worked out to our advantage. We had to deal with a situation that was put in front of us. We had to look at either scrapping the whole thing or trying to fix it. I believe we have fixed it.
We have replaced article 11 of the GATT with tariffication, so we are basically using the U.S. system against them. We used a carry-over from CUSTA, article 710, and it recognized the GATT. We changed that into article 702, which we used last year on the dispute mechanism panel against the United States - the United States was citing article 302.
If you take a look at what the United States is doing right now, there is a reason that we won with 702. In April 1995, the U.S. expanded peanuts under that article. They also have a system of supply management in the United States, in Wisconsin's Eastern Dairy Compact.
We've used all of those issues against the United States, and we've done so quite successfully, and we will continue to do so. As long as I'm occupied both in this job and as a farmer, I will continue to oppose any efforts by the United States to go after our marketing boards.
As my colleague Wayne Easter had said, I have to say that we're hearing something completely different from what we heard in Ottawa. In Ottawa, as an Ontario MP, I was hearing that farmers out in western Canada wanted massive changes to the Canadian Wheat Board. Well, we're out here now, and that's not what we're hearing. As a person who supports marketing boards, I think the exercise we're going through at the present time is very refreshing.
With reference to what you were talking about here in proposed section 61.1, this is nothing more than bookkeeping within the act, under Bill C-72. Proposed section 61.1 is in there for nothing other than to clarify something for NAFTA, that being the moving of a crown corporation into a mixed entity. As soon as we go into an elected board, or a partially elected board, we're moving from a crown corporation into a mixed entity, and that's what proposed section 61.1 is supposed to do.
I have a couple of questions dealing with the election of the board, and I would like everybody here to respond to them. The reason this matter was left open-ended was that we had to come out here to listen to what you thought should be done, and this is what we're hearing.
What I would like to know is, how big should this board be? Should it be eleven? Should it be fifteen? What is your perception of the number who should be elected to this board? I'll throw out a suggestion: would it be ten elected and five appointed?
The next thing is the chairman. Should the chairman be elected or appointed? Should the CEO be elected or appointed?
I'll open that up for comments right now.
The Chairman: Do you want to start, David?
Mr. Orchard: Is it directed at me?
The Chairman: Yes.
Mr. Orchard: Yes, I very well remember crossing swords with you before, Mr. Calder, and your statement that you achieved changes to NAFTA is, with all due respect, false. The Liberals got not one single change to NAFTA. For any change to have been effective, it would have had to go through the Mexican house, it would have had to go through the U.S. Congress, and it would have had to go through the Canadian House of Commons. Not a single change went through.
You made a couple of your rinky-dink little side deals, but they have no power whatsoever. They don't have any power of implementation at all. Those side deals, as you know, didn't go through the U.S. Congress. Bill Clinton said, go ahead, pass your side deals. He patted Chrétien on the head, and Chrétien passed them. But they have no power, so you achieved no changes to NAFTA.
On tariffication, you won because of GATT. The U.S. was citing NAFTA against GATT, but we argued GATT and won. And that's exactly what we've said all the way along: get rid of NAFTA and to back to trading under GATT. That's what John Turner said, and John Turner was right.
You say you defend our marketing boards, but all of our marketing boards are doomed under this NAFTA. It's just a question of time. You know that this tariffication you put in place is being phased out over the coming years. What's going to happen then, when we have no protection on poultry or milk?
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What we're seeing, and what Mel Clark - who you should know - -has said, is that Canada cannot survive as an independent country and that all of our marketing boards are down the tubes if NAFTA stays in place. The Liberal Party understood that under John Turner, but something has happened to your thinking since then.
On the whole question of proposed section 61.1 just being a bookkeeping matter, I don't know who is advising you on NAFTA. You know that you're up against the full brunt of NAFTA once you remove the grandfathered protection of a crown corporation and put it into a mixed enterprise. That's going to make potatoes out of you guys.
On the whole question of whether we should talk about electing the governors or appointing them, it's all moot. The inexorable operations of NAFTA are going to destroy supply management in Canada. That's what it's all about. That's why Cargill Grain pushed for it. I don't know what kind of study you've done on the background to NAFTA, but agriculture was a key component of it. Cargill wanted the Wheat Board out of its way so that it could have its way in Canada, just as it has in Argentina and other countries - and that's what we're facing.
So you guys should get your hands off the Wheat Board. I know the media in central Canada is playing up Sawatzky and these other characters as though they're somehow heroes and spokespeople for western Canada. They're nothing of the kind. The majority of farmers in this west of this country want the Wheat Board left alone, and they do not want it destroyed in the way that this implementation legislation will destroy it.
A voice: You got that right!
The Chairman: Go ahead, Ray.
Mr. Ryland: Thank you, Mr. Calder. I think our presentation spoke to the election process. I guess the one thing we neglected was numbers, but I think we would agree on a maximum of fifteen, with the majority being elected farmers who have the authority to select both the president and the leadership of the board - in other words, a chairman and a vice-chairman.
Mr. Nisbet: I prefer not to give numbers. I don't want to see an elected board, because I would prefer to go the route of the Wheat Board maintaining its status as a crown corporation. It seems to me that the only reason for having an elected board is so that it would be a mixed entity, and I don't want to see that.
Mr. Murray Calder: What I would like to do, then, is still work with the issue of the CEO. Do you feel the CEO should be elected or appointed? The reason I ask that question is that, as a federal politician, I have responsibilities to the taxpayers of Canada in this situation. That's why I was leading with what should be elected and what should be appointed. If we are going to have the credit guarantee, we have to have some sort of input on that board in order to make sure our responsibility to the Canadian taxpayer is upheld. I'd like your comments on that.
Mr. Ryland: I guess that issue again presented some problems for us, and I think we again tried to speak to it. On the one hand, if we're going to have all the authority in the hands of the Governor in Council, then there should continue to be a guarantee of the initial payments and the operating loss. If farmers are going to fund that, though, then I don't see the necessity of the government appointing the CEO. In our minds, there would be a couple of appointed directors to hear farmers' concerns and interests, but the taxpayers of Canada would no longer liable for anything. Why, then, would the taxpayers of Canada need to be protected? On the other hand, if the government is going to retain the authority on that board, we don't need a contingency fund that's funded by farmers.
As we read it, there's enough uncertainty in the legislation to make it difficult for us to know which direction you were planning on going in with this. That's why we've had to say, if this, then this; and, if the other, then the opposite.
Mr. Murray Calder: That's why we're here.
Mr. Orchard: On the question of the governing structure, Mr. Calder, the governing structure is working well the way it is. Who is asking for an elected body? I heard the board of UGG say that farmers should have more accountability. Well, who elected UGG to speak for the farmers of the west? UGG is a private grain company that's having trouble staying out of U.S. hands right now. It is not speaking for the farmers in the west, so who is asking for an elected board? We already have an elected advisory board. Let that board do its job, and don't tamper with the Canadian Wheat Board Act as it currently exists.
The Chairman: Mr. Nisbet.
Mr. Nisbet: I think we covered that in our presentation. We would like to see the present government make two further appointments to fill the commissioner positions. That would satisfy us.
Mr. Murray Calder: Okay, thank you.
The Chairman: Mr. Hermanson.
Mr. Elwin Hermanson (Kindersley - Lloydminster, Ref.): Thank you, Mr. Chairman, and welcome to the committee, gentlemen.
First of all, I'd like to make a comment. In listening to the Liberal questioning, it's becoming very clear that the Minister of Agriculture has proposed that the minister select both the chair of the board and the president or CEO, with the hope that the Liberals could make some trade-offs during these hearings in consultation, allowing the board to choose its own chairman, but maintaining control over who the CEO or president is. This was becoming obvious from the questioning.
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It's also very interesting that you're not alone. Almost every presenter, no matter their position about the board, has said that farmers are trustworthy, and their directors have the ability to make good decisions about hiring the CEO of a board with a changed governance.
Mr. Nisbet, how many members are in your organization?
Mr. Nisbet: We have 35 members, but that's actually irrelevant to the position at hand.
Mr. Elwin Hermanson: I just wondered how big your base was.
Are you a member of the NFU, by any chance?
Mr. Nisbet: How did you guess?
Mr. Elwin Hermanson: Okay, fine.
Mr. Orchard, you certainly added a new dimension to our hearings.
Mr. Nisbet: So has Ray.
Mr. Elwin Hermanson: You've added some excitement to our hearings, and perhaps not too much credibility, but lots of interesting comments.
You've always been very strongly opposed to NAFTA, but you're becoming more and more isolated in your position all the time. We've had submissions from the three prairie pools saying they strongly support NAFTA.
You're right about the Liberals flip-flopping, but they now do support NAFTA, even though you're correct that they did oppose it.
Reform supports NAFTA. We support free trade agreements. The Government of Saskatchewan supports NAFTA. About the only people who don't support NAFTA are your organization, and I guess maybe the federal NDP are still a way behind. I noticed our representative here was taking a lot of notes while you were speaking, at least.
Of course, you were absolutely wrong in saying we were out to destroy health care. The Liberals have taken $7 billion away from health care. We're the ones that are suggesting putting $4 billion back into health and education. I just wanted to clarify those positions.
I think the only serious group we have here is the Concerned Farmers. I appreciated their presentation. I thought they made a lot of good points, and I respect their position. I think they have some credibility at the table.
You mentioned the rally. Yes, I was at the rally. In fact, I had hoped to be able to speak. I noticed that you allowed someone from the government side to speak. I was not given permission to speak from the podium. I also acknowledge it was your right to make that decision; I don't dispute that. But I would have liked to have had a platform to talk about my vision for saving the board. I want to see the board continue. I've made that very clear, and I think you all know that - it's just that our view of how we can best do that is somewhat different.
The problem is that while there were 1,500 people out in Rosetown, basically from across Saskatchewan, the same rally in Alberta - in Edmonton, I think - attracted 150, if I remember correctly; I may be slightly wrong there. But it was far, far less than in Saskatchewan.
In the plebiscite in Alberta - and you can criticize the question all you want, but I believe farmers are smart enough to know what they were voting on - two-thirds of them said they had a view of marketing that was very different from yours.
So we have some real problems. The Government of Saskatchewan's own survey says that over half of farmers in November 1995 thought participation in the Canadian Wheat Board should be voluntary. That was a Government of Saskatchewan survey. So it's not clear-cut.
In fact, I've talked to farmers in your area - and I think most or all of you are my constituents - and they say there is some real division there. There is real rancour, and there are real problems, and I'm looking for solutions.
The position on the Wheat Board put forward by Reform is I think so far the only position that can bring some conciliation and some peace to this issue. It still allows the board pooling and monopoly powers for those who choose to market to the board, and perhaps a majority of farmers would do that. The monopoly might be a bit smaller. It allows those who want to opt out of the board and market on their own to do so, without being able to cherry-pick and go after the best market under the board today and the best market on the open market tomorrow, and I think that's necessary for the Canadian Wheat Board to exist.
What I would like in response from you gentlemen is how can we resolve this issue. I don't see Bill C-72 doing it. It includes some changes to the governance of the board, but they're not significant enough, and they're not going to end the rancour and division. We recognize that, and I think you'd agree with that.
How are we going to solve the problem? We don't want to be in the courts fighting this for the next ten years. That's not good for the board, that's not good for farmers, that's not good for our position on the international marketplace.
The Chairman: Mr. Orchard, and then Mr. Ryland - we'll go across the table.
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Mr. Orchard: Mr. Hermanson, you referred to somebody taking notes here. I think you should have taken a few more notes. You asked how many members our organization has. We have 12,000 members and three offices across Canada. We have never taken a cent of government funding. We're growing. I'm a farmer.
If you can find one thing in my book that hasn't stood up to the test of time, I would welcome hearing from you about it. It has been translated into French, and it's going to be printed in the U.S.
With regard to the credibility of our position on NAFTA, we led the fight. Who were our opponents? Half of them are behind bars here in Saskatchewan, and some of the rest of them are trying to stay out of that same predicament.
Maybe you saw the poll the other day that showed that 91% of Mexicans are opposed to NAFTA. Under NAFTA, Mexico's unemployment rate has doubled, and their wages have fallen by half. We've lost 500,000 manufacturing jobs in this country. Our unemployment rate is twice that of the United States right now. We have people begging in the streets of Toronto, if you've been there recently. NAFTA has been a disaster.
When you ask how we can deal with this, the first thing is that the Reform Party can stop speaking in this country for Cargill Grain and the American grain companies. That's whose interests you're representing.
Under the Canada Pension Plan, you're advocating a private pension, so you'll adopt the Chilean model. Don't say you're not. I've read your position very thoroughly. In Chile, which has adopted a private pension, 55% of Chileans have no pension plan at all when they retire. That's the route you want to take us down in this country.
As far as credibility is concerned, I'd like to match credibility with you any day. Your support is at 8% and dropping. You guys are the dinosaurs here. We're speaking for the majority of farmers in this country, and we want hands off the Wheat Board. That's how we solve this problem.
You and Sawatzky and your other character - I forget his name - trying to truck wheat across the border; those guys are not speaking for the majority of farmers, and neither are you. You'll find that out fairly soon.
The Chairman: Mr. White.
Mr. Marvin White (Member, Saskatchewan Concerned Farmers Saving the Wheat Board): Mr. Hermanson, I'd like to reply to the comments you made about the rally in Rosetown. Yes, you were there. You weren't given an opportunity to speak from the podium, but you were given the same opportunity to speak from the floor mike as everyone else was, including our provincial Minister of Agriculture, Eric Upshall, who took advantage of the opportunity. You declined to do so. There were 1,500 people there, along with others outside.
I think my problem with you, sir, basically is where you are on this issue. It seems you're taking the opportunity to campaign a little here today. You're concerned with the rally in Edmonton. Our rally was in your constituency. You spent more of your time outside, I would say, than in. The opportunity was there for you to speak to your constituents, and I feel you missed it.
Mr. John Lloyd (Member, Saskatchewan Concerned Farmers Saving the Wheat Board): I would like to comment on the fact that you feel a majority of farmers support dual marketing or marketing outside of the Canadian Wheat Board. I'd like to point, first, to the advisory committee that was elected by farmers. It has one dual market proponent on it. The rest are strong Canadian Wheat Board supporters.
As far as a way to take care of this issue is concerned, I'm not scared of a producer vote as far as adding or deleting any grains to the Canadian Wheat Board.
With regard to a lot of the public polls and things that were done in Alberta, first of all, I dismiss everything that's done in Alberta because it's funded heavily by the Alberta government. The Canadian Wheat Board side has very little chance against the millions of dollars that are being pumped in from the other side. Also, a lot of times their polls are inaccurate because they do leave the option for dual marketing, which in my opinion is a farce. There's no way you can have a dual market and a monopoly at the same time.
I think a producer vote would finally put this issue to rest, and I think that's what it eventually is going to come to. Whether or not this bill addresses the problems enough to quiet your side down, I'm not totally convinced.
The Chairman: Mr. Nisbet.
Mr. Nisbet: I'd like to object to your inference that somehow we are not serious about this. We are dead serious. This is our livelihood. That's all I want to say on that one.
Mr. Elwin Hermanson: I wasn't suggesting that. I just wanted -
Mr. Nisbet: You said they were the only serious group here.
Mr. Ryland: Can I comment on a solution?
The Chairman: Yes.
Mr. Elwin Hermanson: That's what I'd like to hear.
Mr. Ryland: Mr. Hermanson, you asked what our solution is. I'm not sure we have a solution, but I think one thing is clear to us: destroying the Wheat Board is not the solution. Voluntary marketing within an agency that may or may not represent some or all farmers is not a solution.
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Let me give you an example. Some of the crops that several of us at this table produce are sold through an agency that price pools. Within the small group of producers who are growing this particular crop, we price pool and we single-desk sell, but we compete against some farmers who are 50 miles down the road. Consequently we have to accept the price that is dictated by the two sellers or by the multiple sellers. We cannot have price differentiation. We cannot withhold from the market while the market moves up.
That's the ability that the Canadian Wheat Board has with single-desk selling. Single-desk selling with some people on the outside is not single-desk selling. It's a dichotomy. They simply cannot coexist. That's why our group has argued in favour of having the choice between one method of selling or the other. Whichever it is, most farmers will adapt, but don't pretend that we can have single-desk selling with some or 49% of farmers selling through some other method. That's not single-desk selling, and we would lose the benefits of single-desk selling that are associated with it.
Now, that's not a solution in particular, other than the fact that our group thinks, and I think, that a vast majority of farmers believe single-desk selling through the Canadian Wheat Board is the solution. To suggest that we can somehow or other abandon that in favour of another group that is not going to be satisfied until the Wheat Board is completely gone is not a solution.
The Chairman: Mr. Collins.
Mr. Bernie Collins (Souris - Moose Mountain, Lib.): Thank you very much, Mr. Chairman.
I want to thank you as individuals and groups for taking the time to be here this morning. Let me say to you that as a member of the Standing Committee on Agriculture and Agri-food I had some concerns about coming west, because I didn't want us to come out here to give a forum to people for destroying the Canadian Wheat Board.
Let me assure you that the Minister of Agriculture, although he's not here, is very concerned about the direction in which we will move as we move into the new millennium. I know some people will take this rather lightly, but your whole existence is based on us doing the right thing.
We could have carved in stone the things we wanted in Bill C-72, and then we would have been criticized because we took a direction one way or the other. The minister is not here for trade-offs. He's here for direction.
I went to Rosetown. I got a pretty good feeling from the 1,500 to 1,700 people as to what they were saying. I didn't have to take notes. It was very clear that they had a very strong feeling about the position of the Canadian Wheat Board.
Are some changes going to be made? Yes. But I think we have to do the right thing so that we don't have to return later and make adjustments.
With respect to the presentation of the board and the structure as you see it, I'm interested in knowing if we put a board in place and it's elected by farmers, as you've done with the advisory board...and I commend you; I'm happy to see that you have a cross-section of ages here. Everybody thinks that anyone who's in support of the Wheat Board is older than Methuselah, and that's not the case. I commend you.
Tell me, given our responsibility here as a committee, what kinds of directions would you say to us to go in? Tell us, the standing committee, all of us collectively, what you want us to do with the Canadian Wheat Board in governance or whatever. I would be interested in knowing some of those things, things that I could take forward.
The Chairman: Mr. Siemens.
Mr. George Siemens (Member, Saskatchewan Concerned Farmers Saving the Wheat Board): Thank you, Mr. Chairman.
On that particular point, Mr. Collins, I would say that something that's missing in the present advisory committee is responsibility. They don't have enough responsibility. They're elected, but what can they do? The same thing is going to apply with the new board of directors and the appointed board. If they aren't given the responsibility as we outlined initially in our recommendation to you, they're going to be no different from the present system.
My question for the present government is how often has the Minister of Agriculture met with the advisory committee over the last three years? That's the problem.
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Mr. Ken DeMong (Member, Administrative Council, Canadian Organic Certification Co-operative Ltd.): One of my concerns with Bill C-72 is the fact that there seems to be a provision in there to take it apart but no provision to put it together - that is, to add to it commodities, crops. I have a real concern about that. If farmers want to have a crop added, there should be a provision in there so that they can - within their numbers - have this opportunity to have a vote. To my mind, that's democracy.
The Chairman: Thank you. You're referring to proposed section 45, I believe.
A voice: A question, Mr. Chair.
A voice: I want to hear what David has to say.
The Chairman: I'll answer from the chair. I don't know how many times the minister has met with the advisory board. I have been contacted by the chairperson of the advisory board as chair of the committee, and I believe when I was parliamentary secretary, too, and I was asked to encourage the minister to meet with the advisory board more frequently because the board had a desire to do that. I sincerely encouraged the minister to do that, but I honestly can't tell you how many times the minister did meet with the board.
Mr. Siemens: That's too bad, because my understanding is that he met with them once.
The Chairman: I don't know. You may very well be correct, Mr. Siemens. None of us are totally aware of what each other does, let alone the ministers.
Mr. Siemens: That's why I made the comment, Mr. Chairman. Therein lies some of the problem. The minister's not meeting with the advisory committee.
If he doesn't meet with the new elected board of directors and the appointed board, we're not going to see any real change in the overall operations. It's a case of the government wanting to keep control by appointing the chairman and the CEO, which we certainly don't agree with.
The Chairman: You've made that very clear, and I appreciate it.
David.
Mr. Orchard: Mr. Collins, I appreciate your soothing words.
Voices: Oh, oh.
Mr. Orchard: I have a little trouble with them when we look at the Liberal record. In your red book, you said you were going to protect the jobs of Canadians, you were going to provide stable funding for the CBC, and you were going to protect our social programs. We've seen you escalate the cuts to the CBC, with 40% of their budget slashed in the last ten years. You've escalated Mulroney's cuts to health and social programs. The other day it was announced that ten hospitals were closing in Toronto alone. We're seeing that kind of downsizing and offloading. You were going to stopKim Campbell's cutting and slashing and you've escalated it.
So I would like to believe that you're going to protect the Wheat Board, but with it in Liberal hands, it's not very reassuring.
If you're serious about asking what to do about the Wheat Board, let this thing die on the order paper.
Who wants it? The majority does not want these changes and you're going to open yourselves up...it's just the opening wedge. The Wheat Board is going to go down the tubes if you start tinkering with it in this way. Just let it die and leave the act the way it is.
I don't know who is exerting the pressure other than the noisy minority backed by the U.S. grain giants. If you talk to the head of Alberta Wheat Pool, Gordon Cummings, about his famous statement that the Wheat Board is encircled by the sharks from the United States, it's those sharks that are demanding the changes. More than ever, we need the strength of the Wheat Board to withstand that.
It's as simple as when they were setting up the CBC. Graham Spry made the same statement that it would be ``the state or the United States''. He made that statement when American radio was moving into Canada and the CBC was set up in response. It's exactly the same for the Wheat Board. If we don't have state involvement in it, it's going to be American-controlled. So the answer to the question is to leave it alone.
The Chairman: Mr. Collins is next, and then we're going to Mr. Hoeppner and Mr. Taylor.
Mr. Bernie Collins: Mr. Chairman, to get back to Mr. Siemens's point, I am concerned if that's a fact.
And I don't have to be soothing for Mr. Orchard. I too know some of the facts about what went on. I'm not into CBC right now. We'll get to that at another time, I'm sure.
What I wanted to get back to is to say that we are serious. I was serious when I went to Rosetown and I heard those people. They didn't all say to just leave it alone. They did say to do something. That's the message I got.
Are we doing the right things? Collectively, I think we will.
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On the governance side, because you as elected officials would like to have the CEO and the president there and you would have control over them, if I said to you, from the standpoint of the minister, ``All right, you elect; you decide what part you see us playing. Do you want us to backstop and make sure we're there as a credit arrangement for you?'', could you live with the fact that we appointed the CEO, and yes, made him a non-board kind of person but responsible, because he's going to be responsible to you who will be elected and responsible to the government? At the end of that day, if that person doesn't meet the expectations you have, then you have the right to recommend removal of that person.
Could you live with that arrangement through the minister?
Mr. Ryland: Yes, I think we could. Given what we understand about the legislation and the proposals, I think if the trade-off was an Order in Council-appointed CEO and the government maintaining responsibility for deficits or contingency fund replacement, we would opt for the Governor in Council appointing the CEO and not having to produce or fund a contingency fund.
Mr. Bernie Collins: But you would have the right to recommend dismissal.
Mr. Ryland: That was a part of my understanding from your comment.
Mr. Bernie Collins: Exactly. Thank you.
The Chairman: I'm going to go to Mr. Hoeppner and then Mr. Taylor.
Mr. Jake E. Hoeppner (Lisgar - Marquette, Ref.): Thank you, Mr. Chairman. It has been an interesting morning.
My first question is to Mr. Nisbet. I got the impression from your statement that you did not support any type of selection bonus or premiums for different contracts of grain through the Wheat Board. Is that correct?
Mr. Nisbet: Yes.
Mr. Jake E. Hoeppner: Do you know about the Warburtons contract Manitoba Pool is offering to farmers in Manitoba through the Wheat Board?
Mr. Nisbet: I know vaguely about it from the press reports, and I heard your questioning to an earlier witness.
Mr. Jake E. Hoeppner: You wouldn't support that?
Mr. Nisbet: It doesn't seem to me to be part of what I would go for.
Mr. Jake E. Hoeppner: So you're all farmers, I gather, every single one of you. I have two questions for you, and I'd like each one of you to answer them.
Do you support these huge selection premiums or bonuses that are paid by millers or grain companies, and have you ever taken part in accepting some of these? I want that on the record.
Mr. Orchard: In answer to your question as to whether I am a farmer, yes, I am a fourth-generation farmer at Borden. The farm was broken in 1904, and the family has been on it ever since.
The answer to your second question, both parts, is no.
Mr. Siemens: I myself have not participated in a premium operation, but I know if the millers in Saskatoon - Robin Hood Multifoods, or the pool for that matter - want a specific kind of grain and they need it in order to maintain their business and satisfy their customer, I think it's very appropriate for them to pay that kind of a premium. Certainly if I was a little bit closer geographically speaking, I would probably participate in it myself.
Mr. White: Yes, I'm a third-generation farmer, and as to your second question, no, I have not as yet participated in any kind of a premium.
Mr. Jake E. Hoeppner: Would you support them, though?
I know you're all farmers, so just go to the second question.
The Chairman: Is there anything more you wish to say, Marvin?
Mr. White: I think I responded to his question.
Mr. Ryland: I'm not familiar with the particular case you're quoting in southern Manitoba. I don't have any problem with mill-door premiums paid by a flour miller in Saskatoon. I have not personally participated in it.
Mr. Jake E. Hoeppner: How about...[Inaudible - Editor]...premiums?
Mr. Ryland: Are you talking about trucking premiums?
Mr. Jake E. Hoeppner: No, I'm talking about special -
Mr. Ryland: I'm not familiar with them in Wheat Board grains. I'm certainly familiar with them in some others.
Mr. Jake E. Hoeppner: I'm talking about Wheat Board premiums.
Mr. Ryland: I'm not familiar with them.
Mr. Lloyd: Any premiums that I'm aware of in elevators or mills are more related to transportation than they are to the Canadian Wheat Board. I don't see the relevance here.
Yes, I guess I support premiums to some extent when they're related to transportation, and yes, I have participated. I've hauled wheat into Robin Hood Multifoods in Saskatoon. My rationale in doing that was I can see the direction in which transportation and the grain companies are going, with larger terminals and distances the farmers are going to have to haul.
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I don't agree with the companies when they say there will be bigger premiums in the future, from unit trains and stuff like that. I think those premiums are soon going to be gobbled up by the individual companies themselves. But while they are there, I may as well take advantage of it.
The Chairman: You have a couple of minutes.
Mr. Jake E. Hoeppner: Mr. Orchard's comments add some bite to our meeting.
The only thing I want to say is the Wheat Board was originated to be a competitor to the grain companies. But the monopoly was given in 1943 under the War Measures Act, and it was there to reduce the price that the Government of Canada could buy grain for so they could fulfil their contracts with some of the war allies.
You say the Wheat Board sold high-quality wheat. I would tell you that's due to me, as a farmer, producing that wheat and the Grain Commission setting those standards. It has absolutely nothing to do with whether it's the Wheat Board that sells it or the grain companies.
The other thing that I thought maybe had some merit in it, Mr. Orchard, was when you said we should have kept on building the Avro Arrow and maybe attacked the United States. We could have surrendered quickly, thrown up the white flag, and had them rebuild our economies, as they did for Japan and Germany. We may have had the advantage there. That is one of the statements you made this morning that maybe made some sense.
The Chairman: Mr. Orchard, I'm sure you'll want to comment. Maybe you could help clarify. Mr. Hoeppner just said the present powers of the Wheat Board were given in 1943 under the War Measures Act. Is that...?
Mr. Orchard: Mr. Hoeppner needs a bit of correction on a lot of things he said. I'm not quite sure where to start.
On the whole question of high-quality wheat, the Canadian Wheat Board has a reputation around the world as a reputable supplier.
Mr. Jake E. Hoeppner: Who grows it?
Mr. Orchard: I grow it and you grow it, and if we don't sell it to the Canadian Wheat Board, we're going to end up selling it to Cargill Grain, they're going to take the profit, and that profit will not come back into western Canada, which is where it comes today.
As for your comment about the war, the Canadian Wheat Board had its predecessors. Perhaps you should study a bit of the history of it, in view of your position on this panel. In the 1920s and the 1930s it was actually set up and put in place. It exists not to drive the price down, but because it's a single-desk seller that ends up making a higher price than farmers would otherwise get. And there's no profit taken off the top.
That's exactly what our grandfathers.... I don't know where your grandfather or your father was during the fight for the board in the 1930s, but the men and women who went out there and laid themselves on the line to create the board were fighting for better conditions for farmers across the west, and they achieved them through the Canadian Wheat Board. That's the legacy behind it.
As to the question on the Avro Arrow, you totally misunderstood what I said. I did not say we should have attacked the United States with the Avro Arrow. I said it was a defensive aircraft and we could have sold it around the world. And yes, it could have been a defence against any country that was invading us.
As it was, we capitulated, signed the defence sharing agreement and NORAD, and now we let the United States look after us. The only country in the world that's ever invaded Canada is now looking after our defence. And if your party has its way, they soon won't have to look after us anymore; the border will be gone altogether.
Mr. Jake E. Hoeppner: Well, I got the impression that you said it had the capability of shooting down the U.S. plane -
Mr. Orchard: The U-2 spy plane; that's right.
The Chairman: Maybe we can keep the discussion closer to the bill than to the Avro Arrow.
Mr. Nisbet: Seeing as we're having a bit of a history lesson just now....
The Chairman: I trust you're going to bring it back into focus.
Mr. Nisbet: It's related, yes.
The Chairman: Thank you.
Mr. Nisbet: The origins of the Wheat Board are that in the early days of this century, the farmers felt unjustly treated by both the railways and the Winnipeg Grain Exchange. They thought by seeking a seat on the Winnipeg Grain Exchange all their problems would be over, but they soon found that would not be the case. So they lobbied to try to establish a wheat board, which turned out to be a voluntary wheat board in the first instance, and then the other history comes into it.
The Chairman: Mr. Taylor.
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Mr. Len Taylor (The Battlefords - Meadow Lake, NDP): Thank you, Mr. Chairman.
I want to thank you and the other folks here today for coming and making your presentations. Particularly it's the first opportunity I've had to express congratulations to the Rosetown folks for the rally that was held there.
I remember that shortly after the Crow benefit loss, some of the Liberals said to me: ``Len, we got rid of the Crow. Where was all the opposition? Why wasn't there a lot of fight out there?'' Part of it was because a lot of them weren't out here on the ground and didn't feel a lot of the opposition that was present. But the Rosetown meeting and others have expressed, prior to actions being taken, that in fact there is a significant concern. When the previous government was in office, I remember the 13,000 people who were at Canada Place, expressing concern about the future of agriculture.
So although sometimes it's difficult to see the immediate results, it's important that people gather together, share opinions, and express feelings. If governments don't listen, that sends a message back to us, but the bigger message is that people feel more like a group when things like that happen and when they're sharing those kinds of feelings.
I want to make a simple comment and then lead into a question relating to Mr. Hermanson's use of the Saskatchewan poll numbers. He used them in the first presentation and again in the second presentation here today. Mr. Hermanson quotes some of the numbers from within a multi-page, multi-question poll. He asked the same question of the Minister of Agriculture yesterday and is conveniently ignoring the answer he got in rephrasing his questions today.
Saskatchewan's Minister of Agriculture yesterday pointed out that it's important, when you're polling, to interpret the overall results of the poll. It's very easy to take one question and misinterpret the whole way of thinking with regard to the numbers.
Indeed there are questions that provide farmers with an option to consider a dual market as possible. Some farmers believe that if a dual market were possible, they'd be happy to choose it. Why not buy into high prices on the open market and low prices under the Canadian Wheat Board, if it's possible? But when asked very clearly through other specific questions, ``Given that not being possible, do you support the Canadian Wheat Board?'', 80% or so of Saskatchewan producers clearly supported the board, knowing and understanding that the option of a dual market is impossible.
Ray Ryland of Concerned Farmers Saving the Wheat Board has said today that he agrees a dual market is not possible out there. The polling results indicate that a lot of younger farmers believe it might be possible to have a dual market.
How can we better communicate to some of those people who continue to believe it is possible that in fact, as has been presented here and in Regina and in Winnipeg, the dual market is a difficult if not impossible proposition? Again, it's primarily the younger producers who have not had the experience of the past where the open market did impose significant hardships on individual producers.
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Mr. Lloyd: I'll comment on that one.
I keep hearing that younger farmers are generally anti-board and older farmers are pro-board. I disagree with that. I'm 29 years old. I went to agriculture school here in Saskatoon and I know farmers from all over the province and western Canada, and I can say that the majority of farmers my age are Wheat Board supporters. My belief is that the anti-Wheat Board campaign comes more from an age group of 35 to 45.
What relevance that has, I don't know. It's just an observation I've made. I'm not sure about the reasons behind it.
When this debate first arose, I didn't really have a stance on it. I wasn't pro-board and I wasn't anti-board. I didn't really know what to think of dual marketing. All I did was simply start looking at the facts. I listened to people talk on both sides of it, and the conclusions that I've come to are that dual marketing won't work, and that the Canadian Wheat Board is the way of the future.
So to answer your question about how to communicate with these younger people, I think it's a matter of education. That's the key. When a person is taking an educated look at this issue, the Canadian Wheat Board comes out the clear winner every time.
The Chairman: George Siemens.
Mr. Siemens: I think dual marketing means one thing to one person, and something else to someone else. That's one of the real problems. I think the vast majority of farmers are very familiar with the single-desk operation. If we had been shown in detail what the alternative is, it would then be much easier to make a direct decision on this very difficult question. It would also have been easier to decide on the ballot that we just handed in here about two or three weeks ago.
I don't know exactly how you would present those details in order to do this. In the old days you'd take a flip chart, you'd show the single-desk on one side, and on the other side you'd show how it was going to work and how people were going to be affected by it. But as I said earlier, this means different things to different people, and that's the problem.
I agree with these two gentlemen here that I don't think it's going to work. I don't think it can. As I say, though, show me and I will believe.
The Chairman: Ray Ryland.
Mr. Ryland: One of the things our organization has argued in favour of is mandating the Canadian Wheat Board to defend itself from time to time. Every time it does that, though, there is a group out there - I guess there are several small groups; we could identify them, but I think you all know who they are - that jump up and down and say it's an agency that should never defend itself.
In some of our work over the course of the last several months, we have argued that the Wheat Board, either directly or through the advisory committee, should have some resources that allow it to convey to farmers what it does on behalf of farmers. Whether it's through using the media, whether it's through enhanced communication pieces that come from the board, or whether it's through some other vehicle, we think the Wheat Board itself should have a mandate to explain itself to farmers. Everybody else in the industry does this. For some reason or the other, though - possibly because it's a government agency, or possible for some other reason that I'm not sure - we have said that the Wheat Board should never defend itself.
I can recall saying to a commissioner of the Canadian Wheat Board several years ago that it had to start doing this. His response was, no, the board had to rely on its friends to do defend it. But I think the time has now come for someone with some direct connection to the Canadian Wheat Board to start explaining to farmers what it is that the board does for them.
The Chairman: I don't know whether David and the other folks want to speak, but I want a point of clarification, Mr. Ryland. You say the Wheat Board should be mandated to do that. I'm not aware of anything, but is there something other than perception - can I use that word? - that prevents it from doing so at the present time?
Mr. Ryland: One of the things that prevents -
The Chairman: Lately, the board has been doing more of that than it did before. As you say, there is some criticism from certain quarters; calls to do that are coming from certain areas. Is there anything preventing the Wheat Board from doing that now?
Mr. Ryland: I don't know that there is -
The Chairman: I don't know either.
Mr. Ryland: - but I know that commissioners tell us from time to time that they can't do it.
The Chairman: Fine.
Mr. Ryland: The second limitation is the $800 per advisory committee member per year. I think it's $800 or $900; it's a very small amount. Given the size of the territory over which the advisory committee operates, it's very difficult to do anything with $800.
The Chairman: Mr. Orchard.
Mr. Orchard: I want to correct one thing. Mr. Hoeppner actually asked three questions, not two. Just in case there was some misunderstanding there when I said no, I meant I had not participated in those premiums, but I'm not opposed to them.
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On this whole question of what should be done, there's a kind of hysteria about crown corporations now, that they are something terrible. The Reform Party is certainly part of that, but the Liberal Party has completely bought into it now, too.
I support Mr. Ryland completely that the Wheat Board should be allowed to defend itself. It's sitting there like a sitting duck with all of these attacks on it, and it's not defending itself. It's something like the federal cause in Quebec. They're sitting there in silence and letting Mr. Bouchard have his way, while Mr. Trudeau used to fight for the federal position. Right now we have the same situation happening here with the Wheat Board.
We've had many successful crown corporations in this country, such as Ontario Hydro, Saskatchewan Telephone, and the Saskatchewan Power Corporation, and around the world countries have used state intervention. That's how Japan built itself into a major economy, by using systematic state intervention. That's how South Korea has built itself into one of the world's major economies without any of the resources Canada has. Norway and other countries have done the same thing. Yet here, we're buying into this mythology that we can't defend what are publicly owned institutions in this country.
I'm saying that the Liberal Party should back away from that and do exactly what you promised to do in the 1993 election. You understood that NAFTA and free trade were bad and that we had to get out of it. You promised to do that, and instead you're implementing it and praising it. That's what's going to lead to the downfall of the Wheat Board and the other marketing boards.
The Canadian Wheat Board brings almost $6 billion into western Canada. It's an institution that's not broken, and so it does not need to be tampered with.
The Chairman: Mr. Nisbet, do you wish to comment?
Mr. Nisbet: I think that one of the things the Wheat Board Advisory Committee could well do would be to help in letting the farmers and the general public know about what things the Canadian Wheat Board is doing.
The Chairman: We'll now turn to Mr. Easter for a brief round, and then we'll conclude.
Mr. Wayne Easter (Malpeque, Lib.): Thank you, Mr. Chairman, and welcome, people.
I think the fact that the committee has come west is helping to create some balance to what was to this point a very unbalanced debate. All we had seen were TV clips of the Farmers for Justice, but we have never seen them table any documentary evidence.
At the end of the day we have to decide as a committee and as a government what we should do and what this legislation should entail, whether or not we should deal with this legislation at all or go back to the original Canadian Wheat Board Act.
The minister, in terms of his statement, has said that he believes that the three pillars should remain, and I know in your presentations, Ray and Walter, you've outlined a number of points where you see the current bill weakening some of those pillars. I would like to know from you and the others where you see in this bill those three pillars being in fact weakened.
Second, I want to come back to the contingency fund, which was raised by the farmers in support of the Wheat Board. In the legislation itself, the reason that contingency fund is there is because of the cash purchasing. It would seem to me that if we eliminated cash purchasing from the bill, then we would to a great extent eliminate the need for the contingency fund, with the exception that the government now only guarantees the initial initial under this bill and not the adjustments.
I want to give you the theory behind why the government is moving away from guaranteeing the adjustments. It is because under the current process you had to go back to the Minister of Finance and through the loops and hoops, and it takes six weeks or thereabouts. The government has never had to use that guarantee, in effect. The operations of the board have been so successful that it has never been necessary. So the theory behind it was that in the day-to-day operations of the board they could use the increase in the interim payment to almost do the same thing as a cash purchase in terms of attracting product in. I want your view on that as well.
Lastly, what has been brought up to us all the time is the Japanese example of not fulfilling contracts. I'm not clear on the rules of enforcement for the Wheat Board, but you brought that up specifically. I'd ask the researchers if they could get us those rules.
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Just what are you coming at? Are you saying there should be very clearly defined rules in terms of enforcement against violations of the contract, the same as in the commercial sector?
The Chairman: John, go ahead. We're going to ask each one if you wish to comment, and we'll conclude the discussion with that.
Mr. Lloyd: One place where I see the three pillars being jeopardized somewhat is through the price-pooling periods being shortened. It leaves some questions as to how short price-pooling periods could be. I heard somebody in the earlier presentation mention a one-day pooling period. You'd then be pretty much open market. So that's one question. I can see what the bill is aiming to do - to avert another Japanese incident where we missed the sale of barley to Japan. A shorter pooling period would have addressed that.
But I feel, and I believe the rest of us feel, that would maybe be better addressed by higher penalties for reneging on contracts, similar to commercial contracts with grain dealers. With those contracts, you pay full damages. If you said you were going to deliver 20 tonnes and you don't deliver that 20 tonnes, you pay the price of that 20 tonnes. I'm not sure that's where we need to be with the Canadian Wheat Board, but we need to be higher than the current.... Marvin has figures.
Why don't you go ahead and just finish on that, Marvin.
Mr. White: I contacted the Wheat Board office itself. I'll read the return message I got:
- The current liquidated damages on wheat and durum are $6 to $15 and barley are $6 to $25 per
tonne. The variance depends on how much the Pool account loses due to the people getting out
of their contracts.
You were referring to the barley issue?
Mr. Wayne Easter: Yes.
Mr. White: That's the exact problem. If, as John said, the penalties were larger.... I don't think we need to go as far as commercial, where it's 100% of the value of your commodity, but maybe somewhere significantly higher - say, 50% - the contract is in fact a contract, not a worthless piece of paper. It has to be enforceable in order for the Wheat Board to know what they have out there in all of our bins to sell.
Mr. Lloyd: If I could add to that, as far as the contract call cut-offs are concerned, if you have a 20% contract call and a farmer doesn't haul his grain and get that 20% in, a lot of times it's pretty relaxed and he can just haul later and throw it in later. The cut-offs aren't rigorously enforced, and I think they should be, because that 20% he didn't haul could end up going outside the board with very little penalty.
It doesn't take much of a premium to regain 10¢ or 15¢ a bushel through an open market in a rising market, whereas $2 a bushel would be a little more of a penalty. Guys would be hopping a little more to get their grain in on time.
The Chairman: Mr. Nisbet.
Mr. Nisbet: In the interests of brevity I will support what the other people have said, and comment on another area.
With the Japanese situation, if the Wheat Board had control over the total amount of barley going into that crop year that situation would not even have arisen.
The Chairman: Mr. Orchard.
Mr. Orchard: It undermines, Mr. Easter, in several different ways the whole question of cash buying, the withdrawal of government guarantees for some of the payments and the consequent setting up of a contingency fund. That weakens it. The elected board is a key component. Who's going to be on the board? Are you going to put somebody from the private grain trade on the board? That is an opening that will weaken it.
Do we see Gargill Grain or ConAgra electing their boards? It's a joke. It's an attempt to weaken an institution that is an effective competitor to those giants. That's what this is all about. It's nothing more or less than that. They don't like it, because it's doing an effective job.
This bill in front of us is a knee-jerk response to a crisis that does not exist. This is a manufactured crisis. All the sound and fury that's coming through is driven by the American companies that want to move in here. They've succeeded in moving in. You saw what happened in retail when Wal-Mart knocked Eaton's out of the picture. They're moving in in all directions. If you open the Wheat Board up with any of these changes, in the climate that exists today, you're opening it up to complete destruction.
The Chairman: Okay.
I want to thank everyone very much for your cooperation and presentations and for taking part in the dialogue.
I want to say that the purpose, as you know, of the committee coming to western Canada is to hear firsthand the views of people on the proposed legislation - and I stress that, proposed legislation - on amendments to the Canadian Wheat Board.
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It certainly is the desire of the government, as the minister has stated, to maintain the three pillars of the Canadian Wheat Board. Are there ways? Some people, as we know - and it's been stressed here today that it's controversial - have different views on that. The duty and the challenge of the committee is to weigh those the best we can, with the minister and with the government.
If the Wheat Board needs to evolve, or if we can collectively contribute to an evolution of the Wheat Board so it can even be stronger, recognizing that the purpose of the Wheat Board is to return to the Canadian producer the maximum that can be returned from the market for their blood, sweat, and tears and the production on their farms, that's our goal. We will do our best.
We thank you very much for your contribution to that. I assume you have all tabled any written documents you wish to with the clerk. We will circulate them, after they're translated, to all members of the committee. Thank you very much.
The meeting is adjourned.