Bill C-18 (Historical)

Marketing Freedom for Grain Farmers Act

An Act to reorganize the Canadian Wheat Board and to make consequential and related amendments to certain Acts

Part 1 of this enactment amends the Canadian Wheat Board Act to change the governance structure of the Canadian Wheat Board and to make other changes in preparation for the implementation of Parts 2 and 3. Part 2 replaces the Canadian Wheat Board Act with a new Act that continues the Canadian Wheat Board and charges it with the marketing of grain through voluntary pooling. Part 3 provides for the possible continuation of the Board under other federal legislation, while Part 4 provides for its winding up if no such continuation occurs. Finally, Part 5 provides for the repeal of the new Act enacted by Part 2.

Marketing Freedom for Grain Farmers Act

[Yvon Godin, NDP, Acadie—Bathurst, NB]

Mr. Speaker, I am pleased to speak to Bill C-18, on the Canadian Wheat Board. This bill proposes to dismantle the Canadian Wheat Board and to eliminate the single desk marketing system for barley and wheat in Canada. The bill creates an interim board with voluntary pooling to be fully privatized or dissolved if it is not privatized within five years of the legislation coming into force. No elected directors may sit on the governing board of the interim board.

The government claims that this bill benefits farmers by giving them the market and giving them a choice, but they have no choice when it comes to dismantling the board. On September 12, a majority of farmers voted in favour of maintaining the Wheat Board. The government should drop Bill C-18. The single desk marketing system for wheat, durum and barley is an institution that has been very successful and is an essential component of the Prairie economy.

The bill is dangerous. It will ruin prairie farmers in these difficult economic times. Although the government's decision to dismantle the Canadian Wheat Board has serious implications for farmers, it was made without any analysis of its repercussions and it goes against the wishes of farmers.

Taxpayers do not fund the What Board and the Conservatives do not have a mandate to go against the wishes of prairie farmers.

The Conservatives are acting in the interests of the big American grain companies by interfering in this matter, in order to lower prices and undermine market security for our own farmers.

Let us look at this from a different angle. The Conservatives say that they represent the majority in the West, on the Prairies. That is why they have made this decision. We must not forget that before the election—I would like to see the Conservatives rise and say this is not true—they promised that, if they were elected, there would be a vote on dismantling the Wheat Board. What has happened to that promise? Do they think that they do not have to keep that promise and not go back to face the farmers just because they were elected?

This is how I see things: there are some farmers who want to dismantle the board and who say they do not need it, and there are some farmers who want the board dismantled. However, taking a broader view, we can ask what the Canadian Wheat Board has done over the past 75 years. It has set prices and stabilized production. Looking at my region, we can compare farmers to our fishers.

I hope what happened to the fishermen on the east coast does not happen to the farmers in the west. Fishermen work hard to keep their boats. It costs a lot of money. They have to pay their fishermen and deckhands, but they have no control over prices. The market dictates the price.

As my colleague from Saint John knows, people who were fishing codfish were getting 50¢ a pound. Even last year, they were getting 50¢ a pound and people were paying $4.50 a pound in the stores. As individuals, they have no control on the price. It will be big business that will run it.

I want to use the fishermen as an example for the people of the Prairies so the Conservatives do not fall asleep on this and shove it down their throats because they do not want have a vote. They do not want to give them the democracy that any group should have and be able to vote on it. Lobster fishermen were getting $2 a pound for lobster. People go to restaurants and pay $10.50 for the lobster on their plates. The fishermen are losing their shirts. They do not even have money to fix the engine on their boat when it breaks down.

What will happen to the farmers who are on their own and need to do the marketing themselves. They are lucky right now to have an organization to do it for them, to give it to them on a silver platter. If the government wants to do something for the farmers, it should do what is right. When it says that it received a big majority to make the decision, this is beautiful.

Only 39% of Conservatives got elected. That is not a big majority. However, when a survey was done, 62% of the farmers did not want it. It was 62% who wanted to keep the board and did not want the government to make the change. The government talks about being close to its people. If it is close to its people, why does it not keep its promise to the people? It had promised, just before the election, that there would be a vote on it. Why not allow the farmers to make that decision? What is wrong with that? What is the government afraid of? Why is it afraid of democracy if it believes in democracy? If it really believes in democracy, what is wrong with allowing all the farmers on the Prairies to vote on it and make a decision?

This has been working for the last 75 years.

[Pat Martin, NDP, Winnipeg Centre, MB]

Mr. Speaker, I know a number of farmers visited the member for Brandon—Souris at his riding on Friday and protested the fact that they were being denied their right to vote on this issue. My question is more along the lines of the code of conduct and the conflict of interest code by which all MPs are duty bound.

What is his view of MPs who make their living as prairie grain producers voting on a bill that their own party says will provide more money for those farmers? In that context I would remind him that when we voted on the bailout for the auto industry, some Tory MPs who were car dealers recused themselves from the vote because it would have a direct impact on the industry through which they make their living.

Does he believe those Tory MPs who are grain farmers subject to the monopoly desk of the Canadian Wheat Board should recuse themselves from the vote tonight and all subsequent votes on bill C-18?

The House resumed from October 20 consideration of the motion that Bill C-18, An Act to reorganize the Canadian Wheat Board and to make consequential and related amendments to certain Acts, be read the second time and referred to a committee, of the amendment and of the amendment to the amendment.

[Robert Aubin, NDP, Trois-Rivières, QC]

Madam Speaker, thank you for giving me the floor and allowing me to participate in this debate. This morning, when I was preparing this brief speech, I began with a formal sort of phrase such as “Thank you, it is a pleasure to be taking part in this debate.” When I reread it, it was clear to me that there was a problem because I am not pleased to be taking part in this debate. I am interested in taking part in it, but it brings me no happiness.

I have discovered something else as I write my speeches. All of my colleagues have discovered it, and they have more experience than I. I have begun hearing voices. We hear a lot of voices in the House, and I have a feeling they stick with us when we are sitting in front of a computer. I figured that some people would ask me why a member from the east, a city boy, a new member of Parliament to boot, is talking about a topic that concerns western Canada. They might also wonder what I know about farmers in the west. I admit that I am not sure when we stop being new members; that is something I have yet to learn here on the Hill. Of course, I agree that there are certain subtleties that I do not grasp. But the fact remains that in Quebec, we know about workers' groups and, what is more, we respect them.

For example, we need only think of the creation, development and growth of co-operative movements, such as the Mouvement des caisses populaires Desjardins, which enabled a number of workers in many different sectors to be able to grow together without leaving anyone behind. There are also agricultural co-operatives. We have some co-operative agricultural movements back home in Quebec. I could talk about investment funds like the FTQ, which was created by workers who invest in businesses. That is another co-operative movement that is an extraordinary jewel in Quebec and that, as I was saying earlier, attempts to give the workers it represents—and for whom it works—the means to grow without leaving the smallest ones behind.

I can say that for Quebeckers, myself included, being sensitive to the cause of workers in every sector, including agriculture, is probably part of our genes. We are listening sympathetically and we care about the legitimate concerns of the western farmers.

In the few hours and days that I have been listening to the debate on Bill C-18, it has become increasingly clear that this is essentially an ideological debate, in which the sacrosanct ideology of free enterprise is being pitted against the willingness of workers to organize themselves and grow together. It has also become clear that it is important to try to clear up some rather off-putting myths that some people have been spreading here on the Hill for months.

Here is one. Since the debate began on Bill C-18, I keep hearing people talk about western farmers as though they were one homogeneous group. I think the reality is quite different. Now is the time to put our democratic rules into practice, the very rules that epitomize the society in which we live. Since September of this year, I have been living in a strange world, one where the basic democratic rules that I taught for such a long time seem to have been rewritten. I used to teach my students that the free and democratic expression of a vote was, in most cases, 50% of the votes plus one, except in some cases of associations or constitutions that require two-thirds of all votes. However, 50% plus one, I think, was a clear enough agreement for everyone. However, since May 2011, my colleagues across the floor have been trying to convince me that 39% of the votes is a strong mandate.

I have heard it enough times that it has started to stick. I am not saying that I agree, but I hear it a lot. I still have a hard time with this concept, but I do hear it.

In reading the results of the referendum of western farmers, I thought to myself that if 39% is considered a strong mandate, then how would we describe 62%? The word that came to mind was “colossal”. It seems as though western farmers, although they were probably not unanimous, gave a colossal mandate to their association to do everything possible to protect and safeguard the Canadian Wheat Board. Furthermore, when an institution belongs to the farmers, is managed by the farmers and is funded by the farmers, I seems to me that the decision should, at the end of the day, be theirs to make.

When I agreed to become a member of Parliament on May 2, I knew that part of my job would be to help draft, introduce and vote on legislation that would guide our way of life, but little did I know that, as legislators in this House, we could somehow be exempt from the law when we felt like it.

That is what I understand from the attitude of the government which, according to the act, has an obligation to consult by referendum or plebiscite but has decided to try to get around this obligation and is refusing to recognize the very referendum conducted by farmers. Does this mean I have to go back and teach my students something even worse? The act requires a referendum for any major change. Does that mean that dismantling the Canadian Wheat Board does not constitute a significant change in its development?

A certain number of factors also lead me to believe that we could consider a mixed model under which the majority would keep the Canadian Wheat Board while those who are not interested could suggest another model. That is what the government also seems to be proposing in its bill. I am reluctant for one simple reason: although the model is interesting theoretically and looks good on paper, in reality, it does not work. In fact, without the Canadian Wheat Board, farmers will be in competition with each other rather than working together as a single major player that is able to compete with the large, multinational agribusinesses of the world.

The smallest farmers will struggle to save their family businesses, to the advantage of the largest producers who will have the means to buy them up. Clearly, we would be making the economy of many agricultural regions in western Canada more fragile. Dramatic drops in price and loss of revenue would be unavoidable since the rule of the competition would now be every man for himself. In this regard, it seems to me that Australia's experience should serve as a warning and that we could learn from their experience.

In addition, have we truly considered the social consequences of shutting down the Wheat Board? Of course, it is not just about money, but the Wheat Board does allow for marketing in 70 countries. I would like the government to name me one farmer who could do that without selling his grain to a large multinational company.

The Wheat Board puts $4 billion to $7 billion back into farmers' pockets each year and it has many advantages.

In closing, I would like to ask a very quick question. Why does the government not want to hear western farmers' clear and democratic statement?

[Robert Aubin, NDP, Trois-Rivières, QC]

Madam Speaker, I listened carefully to the speech by my distinguished colleague, and I would even say that I listened emotionally, since it is clear that this issue is close to his heart. I was very touched by his description of his family and his father, who tried to pay the bills by exporting his grain. His speech gave me the impression that the cooperative movement at the heart of the Canadian Wheat Board also contributed to an increase in revenue for all farmers.

Will the passage of Bill C-18 mean that smaller producers will end up facing the same problems we once managed to get rid of?

[Peggy Nash, NDP, Parkdale—High Park, ON]

Mr. Speaker, I am pleased to rise today to speak to Bill C-18 and in support of the Canadian Wheat Board. The board is the largest and most prosperous grain marketing board in the world. It sells grain around the globe. It makes arrangements for shipping grain from thousands of farmers to consumers in over 70 countries. In an average year, the board puts some 21 million tonnes of wheat and barley on the market.

In addition, all profits from these sales, between $4 million and $7 million a year, are paid back entirely to farmers. The board does not hold on to any income, apart from what it needs to cover costs and manage the financial risks.

The board mitigates the risks run by farmers, particularly concerning late payments, selling grain to buyers at inappropriate times and shipping the grain to buyers. This is a key problem, considering the large geographic area of the Prairies.

Batch selling has also allowed farmers to have a significant influence on the handling and shipping of grain, and on international trade policies. The board works in partnership with the industry and the government to promote policies concerning trade, transport and other areas that benefit wheat and barley farmers in western Canada. The board has defended farmers remarkably well in cases of unfounded trade disputes and has won important victories that resulted in better fees and rail service.

The board's single desk structure has ensured financial stability, sound risk management and secure supply chains, an indisputable advantage for farmers.

Furthermore, the Canadian Wheat Board is not a government-funded agency or a crown corporation. The Canadian Wheat Board is not funded by Canadian taxpayers. Farmers pay for its operations from their grain revenue.

Ten of the 15 members of the board of directors of the Canadian Wheat Board are elected by farmers. Farmers consistently elect a majority of directors who support the single desk structure.

The Conservatives have no mandate to go against the wishes of prairie farmers. The Canadian Wheat Board is controlled, directed and funded by farmers. Farmers should be the ones to decide the future of the marketing organization that they run and they pay for.

They have made their decision clear. The results of the Canadian Wheat Board plebiscite released on September 12 show that a strong majority of farmers want to maintain their ability to market wheat and barley through a single desk system. Sixty-two per cent of respondents voted in favour of retaining the single desk for wheat, and 51% voted to retain it for barley. A total of 38,261 farmers submitted mail-in ballots in the plebiscite, a participation rate of 56%, on par with the last three federal elections and higher than many municipal and provincial elections.

Canada runs the risk of losing $200 million to $500 million a year in board price premiums.

The board manages a supply chain from gate to plate. It has an enviable international reputation for its quality and uninterrupted supply, its service and superior technical support.

Grain sales made under the exclusive jurisdiction of the board guarantee a secure supply of grain, thus guaranteeing strategic and orderly sales. This gives farmers a competitive advantage in the international grain market. On their own, farmers would have to sell by auction. They would have to decide whether or not to sell depending on the circumstances, a gamble that could cost them their farm.

In fact, many studies carried out by well-known agricultural economists, based on data compiled by the board, concluded that the single desk model allows Prairie farmers to bring in millions of dollars more per year than on the open market.

The dismantling of the single desk system will have a serious impact on communities across the Prairies. A 2005 economic impact analysis by PricewaterhouseCoopers found that the Canadian Wheat Board contributes a gross output of $94.6 million to the city of Winnipeg. In addition to its more than 400 employees at its head office, PricewaterhouseCoopers calculated spinoff employment from the Canadian Wheat Board to be more than 2,000 jobs, with a total labour force income impact on the city of more than $66 million. At the provincial level, PricewaterhouseCoopers put the Canadian Wheat Board's gross output contribution at $323 million with more than 3,000 jobs and a total labour income impact of more than $140 million.

The Conservatives have argued that the Ontario experience with removing the single desk can be applied to western farmers, but one cannot compare apples to oranges. The examples are completely different. Ontario wheat farmers produce wheat for pastries, cookies and cakes. They have a ready market available locally. In contrast, prairie wheat farmers produce hard red spring wheat which does not have an extensive local market. Ontario wheat farmers sell about 90% of their product within Canada and the northern U.S., but 80% of the wheat grown in western Canada each year is exported overseas. That means while Ontario farmers have low transportation distances and costs, prairie wheat farmers must pay freight costs to transport grain long distances to inland terminals and to port.

Of course, the other crucial difference between the Ontario experience and the measure being discussed here is Ontario wheat farmers ended their single desk system through a farmer-led democratic process. Prairie farmers have voted in favour of keeping the Canadian Wheat Board and face having it taken away against their will.

A better comparison can be found in Australia. Western grain farmers can look to Australia to know what is in store for them when the single desk is eradicated, and it is not pretty. When the Australian wheat board had its single desk power, wheat could command a premium of over $99 a tonne over the American wheat, but by December 2008, it had dropped to a discount of $27 a tonne below U.S. wheat. In three short years Australia's 40,000 wheat farmers went from running their own grain marketing system, virtually all of Australia's wheat, which was 12% of the world's wheat production worth $5 billion, selling it on their own behalf, to being mere customers of Cargill, one of the world's largest agribusiness corporations, which is privately owned and based in the United States.

Before making any changes to the board, the government must study the impact of its dismantling and analyze the effects this would have on Canadian grain farmers. Otherwise, it is playing Russian roulette with the Prairie economy and with the revenue sources of western farmers.

Allen Orberg, a farmer and chair of the Canadian Wheat Board's board of directors, has said that this government's imprudent approach will derail the Canadian grain industry. It threatens the future of a sector with $5 billion in exports every year. It will take money out of the pockets of Canadian farmers and give it to American corporations.

In closing, the important thing is to give farmers a say. They have voted. They want to keep the Wheat Board. It is incomprehensible that the government would override the democratic will of farmers and dismantle the Canadian Wheat Board.

[Anne-Marie Day, NDP, Charlesbourg—Haute-Saint-Charles, QC]

Mr. Speaker, today I will speak to Bill C-18. I wish to support the coherent views on this bill brilliantly expressed by my colleagues and stand up for the farming families in western Canada who, in these tough economic times, must fight not only global economic instability, but also the destructive actions taken by their own government.

Bill C-18, as proposed by the government, quite simply must be scrapped because the provisions of this new legislation jeopardize the financial stability of western wheat farmers and of all families associated with the sector.

By attacking the Canadian Wheat Board without just cause, the government is conducting a political and ideological crusade because of the supposed benefits of the open market. However, our national economy needs to be protected and supported more than ever. The Canadian Wheat Board is a long-standing organization that has proven itself and been a powerful force through the years and the economic downturns that have occurred since it was established in the 1920s.

It is also imperative to remind Canadians that the board was created by farmers for farmers, that it is managed solely by farmers, and that it is funded entirely by farmers. No taxpayer money is given to this organization, which is not a crown corporation.

The first question that Canadians are entitled to ask is the following: what is the government doing? Once again, this is poorly-disguised political interference for the purpose of increasing the Conservatives' control over self-managed organizations that are necessary and work well, all in the name of market liberalization.

Canadians are not fools. They know that this politically motivated gesture will ultimately weaken Canadian wheat production and benefit big international grain companies that will be happy to snatch up Canadian grain at lower prices. Without the board's negotiating power, individual farmers will lose their voice and the guarantee of the best price for their crop on the world market. In this dark hour when an unprecedented recession is hanging over our heads like the sword of Damocles, the government should be focusing on protecting our economy instead of lining the pockets of big multinational grain companies to the detriment of all western Canadian families.

Is this government so out of touch with reality that it forgets to listen to its people, who are demonstrating in the streets right now for economic action and a more equitable distribution of wealth? Before it leads the Canadian nation into the abyss, even going so far as endangering the country's food sovereignty, the government ought to hear what western farmers want and then respect their choice.

Canadians also need to know that the Canadian Wheat Board generates between $4 billion and $7 billion a year in revenue. In 2009-10, the Wheat Board recorded profits of $5.2 billion and had operating costs of just $75 million—I am talking about net profit. In total, over 21 million tonnes of wheat and barley are sold each year at the best possible price on the world market as a result of the Wheat Board's marketing ability and its negotiating power.

The Wheat Board is also a single desk that facilitates access to the world market for farmers who do not necessarily have all the resources they need to reach their buyers. The Wheat Board is also a marketing agent that does not keep any profit; rather, it returns all its revenue to the 75,000 farmers that it represents who, thanks to the Wheat Board, are able to sell their grain in 70 countries. Above all, the Wheat Board is a strong and unique voice that is well represented on the world grain markets, a voice that the Prime Minister's government stubbornly refuses to hear.

What Canadians understand about Bill C-18 is that the measures proposed by the government will be extremely harmful to our economy.

The dismantling of the Canadian Wheat Board would weaken our farmers' bargaining power with their buyers, since these farmers would have to fight alone to get the best selling price and they would be competing with their neighbours.

Ultimately, lower selling prices for grain will cost farmers hundreds of millions of dollars. Instead of going into the pockets of our Canadian families, these millions of dollars will go into the pockets of grain conglomerates, which will have the final say on the purchase price of our wheat and barley. Obviously, the government would rather satisfy big multinational corporations instead of the Canadian people.

In the long term, we can expect that, as a result of these measures, a number of family farms will shut down once they are no longer profitable, which will in turn increase the vulnerability of families in the west.

Why would the government want to jeopardize the existence of an organization that is not losing jobs, that earns profits for our farmers, that is managed well and that, at the end of the day, has nothing but positive effects on our economy? If this organization were to disappear, there would be all kinds of negative effects on the entire community.

The government claims that it wants to allow farmers to choose whether they market their crops with or without the board. With the potential dismantling of the board, the government is not giving western farmers any choice. There have been no studies of the impact of this decision. I remain convinced that the farmers concerned are particularly shocked to see that the government is taking big risks with their income and their retirement without bothering to do its homework.

Canadians have had enough of a government that does not listen to their needs, that is completely out of touch, and that dares to lie to them at will.

The government tells anyone who will listen and believe that it is keeping its election promises. How is this possible when it promised to broadly consult farmers before last May's election? A few days after May 2, the government announced that there would be no plebiscite on the Canadian Wheat Board.

In the speech he gave yesterday, the Parliamentary Secretary to the Minister of Natural Resources and for the Canadian Wheat Board, with the support of his Prime Minister, embellished the lie by arguing that these new measures will give farmers more freedom and choice. However Canadians are well aware that, in this rather scandalous matter, there is no freedom or choice for the 62% majority who said they were in favour of keeping this single desk. No freedom, no choice, not even the right to speak and be heard.

The government's lack of respect for western farmers gets worse. In its own press release, it dares to state that it consulted with stakeholders from across the value chain before making a decision. Does this mean that farmers—including the 62% who want to keep the board—are not part of the value chain for their own products, since they were not consulted?

I am sure that western farmers will be shocked to hear that this government has excluded them altogether from the value chain for products—

[Sadia Groguhé, NDP, Saint-Lambert, QC]

Mr. Speaker, I thank the hon. member for the question. I think the government is continuing to ignore the very people most affected by this. This reminds me of Bill C-11, where the people most concerned are being completely ignored. The same thing is happening with Bill C-18. The people most affected are being ignored.

The Conservatives think they are the only ones who can speak for all farmers, and that is simply not true. The fact that they are ignoring the plebiscite that was held proves that they are not listening to all farmers.

[Sadia Groguhé, NDP, Saint-Lambert, QC]

Mr. Speaker, first, I would like to inform you that I will share my time with the member for Charlesbourg—Haute-Saint-Charles.

To be able to truly have a thorough debate on Bill C-18 and the negative implications it will have on prairie farmers, we must first answer some initial questions to learn about the history of the institution at the heart of Bill C-18. Where did the Canadian Wheat Board come from? What was behind its creation? What role did it play in the past in the lives of farmers? What role does it play today in the economy and lives of prairie farmers?

The Canadian Wheat Board, whose future is at stake in Bill C-18, is an organization that markets wheat, durum and barley for prairie farmers. Recognized as the largest and most successful grain marketing organization in the world, the Canadian Wheat Board, which is what Bill C-18 is all about, was created in the 1920s, when farmers in western Canada started to join together to get the best price on the wheat market.

It reminds us of the farmers' fight to protect their interests against powerful foreign companies that tried to crush and destroy them. In 1943, continuing that fight, farmers in western Canada opened a single desk that allowed them to sell their wheat through the board. The pooled sales that began through this single desk gave farmers a powerful voice in grain handling and transportation as well as international trade policy.

The board ensures that farmers get the highest overall returns as they have an effective monopoly on wheat sales since there are no competing sellers of western Canadian wheat. The single desk structure provided financial stability, prudent risk management and certainty of grain supply. In other words, the single desk contributed to progressive marketing of wheat in the interests of farmers, not of large American or other foreign companies.

The single desk continues to play the same role today, as the board is controlled, directed and funded by farmers. It is not a burden on the state and it is not government-funded. It was in this spirit that the act to create the Canadian Wheat Board gave the board the mandate to generate the best possible returns for farmers by taking advantage of the powers given to this single desk.

This organization continues to play an important role for farmers as well as for the economy in the Prairies. It sells grain all around the world and arranges for its transportation from thousands of farms to customers in 70 countries. About 21 million tonnes of wheat and barley are marketed by the Canadian Wheat Board each year. Given that 80% of the wheat grown in western Canada each year is exported overseas, it is easy to understand the major role that the Canadian Wheat Board plays. Yet the Conservatives want to dismantle it to benefit private companies that are more concerned about profit than about farmers, who create jobs for a large number of Canadians. Acting as a marketing agent for farmers, the Canadian Wheat Board negotiates international sales and passes the returns back to farmers, who spend them in Canada.

Clearly, the Canadian Wheat Board has real, tangible benefits for the economy of the Prairies. The Conservatives are attacking those benefits with Bill C-18. I find this completely unbelievable. What is the purpose of Bill C-18, which the Conservatives have brought before this Parliament? Bill C-18 proposes dismantling the Canadian Wheat Board; putting an end to the single-desk marketing of wheat and barley; replacing the board with an interim structure with voluntary membership; and privatizing it or dissolving it completely if, in the coming years, it is not profitable for any private firms.

Bill C-18 is a reflection of the neo-liberalism that underlies economic policy. Dismantling the Canadian Wheat Board would have a devastating effect on prairie farmers.

At a time when the Canadian economy needs measures to get unemployed Canadians back to work, the idea of doing away with the Canadian Wheat Board seems ridiculous and irresponsible.

That is why when prairie farmers—who would be the most affected—were called upon to vote on this government initiative on September 12, 2011, they rejected the idea, even though the government likes to tell anyone who will listen that dismantling the Canadian Wheat Board would be good for farmers. A majority of farmers voted in favour of maintaining the Canadian Wheat Board. Of a total of 38,261 farmers who voted, 62% voted to maintain a single desk for the marketing of wheat and 51% voted for the same for barley. Acting against the will of the majority is undemocratic and we will not accept it.

The NDP believes that in the current sluggish economic context, the dismantling of the Canadian Wheat Board would have an incalculable impact on the lives of farmers as well as on the economy of the Prairies, given the role that the Canadian Wheat Board has played and continues to play. Passed without any clear analysis of the repercussions it could have on farmers in western Canada, the measure to dismantle the Canadian Wheat Board will be ruinous for them. The bill serves the interests of major American grain companies by allowing them to lower the market price for wheat and undermine the security of our own farmers.

If the Canadian Wheat Board is dismantled, Prairie farmers will sell as individuals, which could result in some farmers losing their farms to huge foreign companies.

Western Canadian farmers might experience the same fate their Australian counterparts did when they lost their single desk. Right now, the price of Australian wheat, which once commanded $99 a tonne over American wheat, has dropped, in just three years, to $27 a tonne below U.S. wheat. As a result, 40,000 Australian farmers who were running their own grain marketing system became customers of one of the largest agribusiness corporations, which is privately owned and based in the United States. Since 2006, Australia's national wheat sales have dropped from 100% to 23%. Meanwhile, 25 other corporations are competing to see how to make a profit on the discrepancy between buying and selling prices.

Let us make responsible decisions. Let us avoid putting our western Canadian farmers in a situation similar to that of their Australian counterparts.

I would like to remind the House that the Canadian Wheat Board sells Canadian farmers' grain products in 70 countries. All the profits from these sales—between $4 billion and $7 billion per year—go to the farmers. In 2009-10, the Wheat Board's revenue was estimated at approximately $5.2 billion and its administrative costs were approximately $75 million.

This is revenue that we will lose if we dismantle the Canadian Wheat Board. By reducing the benefits that farmers receive from the Wheat Board by virtue of the fact that it is the sole seller of western Canadian wheat and barley, the Wheat Board's demise will no doubt affect the Port of Churchill and the farmers who deliver grain through the port, because the Wheat Board is the primary user of this port. Generally speaking, Wheat Board shipments account for 95% of the cargo that goes through the port. In a free market, private grain companies will have no incentive to use the Port of Churchill, since they have port facilities on the west coast, in Thunder Bay and along the St. Lawrence.

The demise of the Wheat Board will also affect producer car shippers and short-line railways in that farmers who load their own cars will save from $1,000 to $1,500 in preparation and cleaning fees per car that is shipped.

The demise of the Wheat Board will also have financial repercussions on Winnipeg and Manitoba. In fact, studies have shown that the Wheat Board contributes $94.6 million to Winnipeg's gross output.

In conclusion, dismantling such an institution in the name of blind neo-liberalism means sacrificing prairie Canadians to benefit foreign grain companies. We cannot support such a bill, which would mean supporting government control over the Canadian Wheat Board.

[Ralph Goodale, Liberal, Wascana, SK]

Mr. Speaker, it is a pleasure to take part in this debate. It is obviously a debate that provokes a great deal of emotion, and I suppose that is understandable.

The grain industry in western Canada has always been a source of considerable controversy. That is because it is a multi-billion dollar industry. It has huge importance to the livelihoods and way of life of many prairie families.

Its structure is also significant, with tens of thousands of individual farmers on one side, most of them in family farm operations, and then a few large corporations on the other side, namely the railways and grain companies--many of them foreign-controlled--that run the grain handling and transportation system.

It is an inherently uneven playing field, and farmers, sadly, are positioned to get the short end of the stick. Down through the years, various attempts have been made by producers, communities, farm organizations, governments and others to correct or at least to try to offset that imbalance. The strongest effort, and certainly the most successful, has come through the Canadian Wheat Board.

After a number of dubious experiences with previous open markets and many failed experiments with voluntary pooling over the years, the Wheat Board was first created--by a Conservative government, incidentally--in 1935. It was given many of its essential single desk characteristics by a Liberal government in 1943.

It is interesting to note that for several decades after 1943, the board's existence was actually considered to be temporary, and it had to have its powers renewed by Parliament by a vote in this House every few years.

They were, of course, renewed year after year, decade after decade, because those powers exercised by the Canadian Wheat Board had proven to be effective. Farmers over those years effectively wanted and supported the board. Successive federal governments, both Liberal and Conservative, acted on the farmers' opinion that the Canadian Wheat Board's mandate should be renewed.

The last major revision of the Wheat Board's structure came in 1997. As the minister at that time, I knew our government had four primary objectives in the legislation that it introduced in 1997. That legislation came into effect on January 1, 1998.

The first objective was to make the Canadian Wheat Board a truly producer-controlled operation. It is, as a result of that legislation, no longer a crown corporation. It is not a government entity run by five hand-picked servants of the government beholden only to the government. Instead it is a modern marketing organization controlled and operated by farmers themselves. That was the first objective of that legislation 13 years ago.

Second, we needed to make that producer control legitimate and accountable by making the Canadian Wheat Board fully democratic. Farmers themselves now elect the overwhelming majority of the board of directors of the Canadian Wheat Board, which is an innovation that has existed in the law only since 1998. Farmers elect 10 of the 15 directors on the Canadian Wheat Board. Obviously, if the farmers do not like what those directors do, they can be voted out of office. The elections occur every two years on a rotating basis.

It is interesting to note that down through the years since 1998, 80% of the farmers elected, re-elected and then re-elected, in some cases, by their peers to serve on the Canadian Wheat Board's board of directors have been strong supporters of the single desk system. That is like a referendum that happens every two years, and the single desk side in that vote wins 80% of the time.

That was the second objective: to make the Canadian Wheat Board not only producer-controlled, but democratic in its operations.

Third, these directors were given the scope, the mandate and the power to innovate, to change, to be flexible, to provide prairie producers with an unprecedented range of options and alternatives in how grain is marketed and how farmers are paid for their grain, and the board has delivered on that mandate over the last number of years by introducing a number of groundbreaking innovations in the board's operations.

As this debate has raged over the last number of weeks and months, I have heard a number of farmers make the point that in many ways the criticisms we hear these days about the board's operations are really about the old board, the way it used to exist before 1998, before democratic producer control took over. That old board was gone more than a decade ago. Since then, there has obviously been a dramatic improvement.

Principle number one was producer control. Principle number two was democratic operations. Principle number three was flexibility, innovation and accountability. Principle number four was this: for the future, we built into the law a clear provision to put the ultimate fate of the Canadian Wheat Board in the hands of farmers themselves.

Section 47.1 of the existing act does not prohibit changes to the single desk. It does not prohibit even the elimination of the single desk. However, it makes it clear that the decision is one for farmers to take. It is not for politicians or bureaucrats, but for farmers themselves. Section 47.1 embeds in the law the principle that there ought to be a plebiscite, a vote, held among prairie farmers to determine whether or not the nature of the single desk ought to be changed.

Before legislation like Bill C-18 can be legally introduced in this House, the government is obliged to consult with the Canadian Wheat Board's board of directors, and it is obliged to hold a vote among farmers on the specific changes it is proposing to make.

No such vote has been held by the government prior to introducing Bill C-18.

The minister says he is not obliged to have a vote because he is not making any kind of technical change to the single desk. He is not making small modifications to the way the single desk operates. He says that if he were making changes of that kind, then in fact he would be obliged to come to farmers through a vote or a plebiscite to get the farmers' opinions on what he is proposing to do.

The minister says that he is not obliged to do that in this case because he is not making smaller technical changes to the single desk: he is simply abolishing it altogether.

Let us think about that logic. It is like the doctor saying, as the patient being wheeled into surgery, “Well, if I am just going to take out your tonsils, I will do you the courtesy of asking for your opinions, but if what I have in mind is euthanasia, killing you altogether, I will not bother to ask for your advice”.

Obviously the government's position is ludicrous on that point. The legislation has the effect of destroying the single desk, and accordingly section 47.1 obliges the government to get the opinion of farmers before they take that step. The government has not done so, and therefore, in our opinion, this legislation is not proceeding properly at this time.

Liberals in Parliament will not support this legislation, Bill C-18, to kill the single desk marketing system for the Canadian Wheat Board for at least four strong reasons.

The first one has to do with process. The CWB is now democratically controlled and operated by western Canadian grain producers. Today's legislation eliminates that democratic producer control, and it replaces it with direct and complete government control. The elected producer directors will be gone, and instead the board will be run only by five people appointed by the government.

The Conservatives are also disenfranchising farmers by ignoring their legal obligation as it exists today to hold a producer plebiscite before introducing any legislation that has the effect of destroying the single desk. That is our first reason for opposing this legislation: the attack on democracy, the attack on proper process, the ignoring of the right of farmers to vote.

Our second reason is one of cost. By killing the single desk operation, the government is effectively reducing the value of Canadian wheat and barley in global markets by as much as $400 million to $600 million per year. That is the typical price premium that the Canadian Wheat Board is able to gain every year for western farmers and bring into the Canadian economy because of its ability to price discriminate.

The ability to price discriminate depends exclusively upon the existence of the single desk operation. If we have a single desk operation, we can go to each individual grain market in the world and extract the highest price available in that market. Obviously, the higher priced markets in Europe such as the high scale department stores and food stores in London, England, will pay a higher price than will Yap Milling in Indonesia. They are two entirely different markets. If we have a single desk operation, we can distinguish between those markets. We can get the top price in London and the top price in Indonesia and they are not the same price.

If there is leakage everywhere because there is no single desk operation, we will then be competing for the bottom price. It would be a race for the bottom price. We will end up with the lowest price rather than the top price available in each individual market.

Without the single desk operation we will lose the ability to price discriminate. According to many experts in the industry, the cost of that will be roughly $400 billion to $600 billion a year depending on the marketing year. Without the single desk operation, the ability and the clout to price discriminate will be gone.

The third reason is that the government's new legislation will also reduce farmers' clout here at home.

There will be a lot of collateral damage with the loss of the Wheat Board. For example, the producers' right to load their own rail cars as a safety valve against commercial exploitation will technically remain in the wording of the Canada Grain Act. However, without the Canadian Wheat Board to give producer car shipments logistical priority that right will be largely meaningless.

I note that the report the government commissioned on so-called marketing freedom which was published a few weeks ago clearly makes the point that the right to access producer cars, not actually the effective functioning of producer cars but just the access to producer cars, will continue in the Canada Grain Act. However, that report specifically states they would not be given any priority in the system. Therefore, we can order our producer car and we might get it three years from now if there happens to be nothing else happening at the time. It is a right without any meaningful application unless we have someone who is managing the logistics of the system and will give the producer car some priority.

Similarly, producer-owned grain terminals and short-line rail operations will be at the mercy of large grain companies and the railways. The grain companies and the railways have always opposed the existence of the producer-owned grain terminals and short-line rail operations because it means that grain goes around their system, it provides competition and they do not get the tariffs and the fees. Obviously, they are not going to be conducive to allowing those innovations to continue to be used in the system.

What is most important in terms of collateral damage is there will be no player in the western grain handling and transportation system with the clout and the will to stand up for farmers and to take on entities like the railways when their services fail, which happens about 50% of the time according to the government's own rail service review, or when the railways attempt to extract excessive freight rates.

That is the third reason why we cannot support the legislation.

Finally, the Conservative government is about to hand to the United States a huge trade freebie.

The elimination of the Canadian Wheat Board has been the Americans' number one trade objective in North America for the past 20 to 25 years. Courtesy of the Conservative government, the U.S. is about to receive its fondest wish and Canada will get absolutely nothing in return.

The Canadian Wheat Board's single desk system as well as its clout and ability to outdo the American grain marketing system will be gone but Canada will have no better access to the U.S. market. Country of origin labelling discrimination against Canada will continue. The buy America trade discrimination against Canada will continue. The new U.S. marine tax discrimination against Canada will go on. Border thickening will continue. U.S. discrimination against Canadians working in the defence industry will continue. The U.S. attack on Canadian softwood lumber will continue. U.S. authorities will continue to close the border to Canadian wheat and other products whenever it suits them. Thus, Canada has gained absolutely nothing from its unilateral disarmament in the grain trade.

I reiterate that there will be a failure to apply due process and recognize the producer democratic control of the Canadian Wheat Board. There will be an imposition of new costs on farmers and a loss of value to the tune of $400 million to $600 million a year in terms of price premiums left on the table and not captured for western Canadian producers. As well, there will be a loss of clout in terms of dealing with other aspects of the grain handling and transportation system, especially regarding the ability to take on the railways when necessary.

I would note on that last point, that on at least two occasions in the last few years the Canadian Wheat Board has taken the railways to the Canadian Transportation Agency. As a result of those proceedings, it won the farmers something in the order of $200 million in excess freight charges. That was money that was taken out of farmers' pockets. The Wheat Board put that money back into farmers' pockets. The bill will remove that authority, that ability and that clout.

This is a unilateral disarmament of the Canadian farmer. The Americans are giving up absolutely nothing and will not even guarantee absolute access to the U.S. grain market. However, the Canadian Wheat Board, a pillar of the system in Canada, will be gone.

For all of those reasons we oppose the bill.

We propose an amendment to the motion that is presently before the House.

I move:

That the amendment be amended by adding after the words "70 years" the following:

“, including specifically the elimination of the Canadian Wheat Board's role in managing transportation logistics and thereby leaving farmers without an effective voice with respect to rail service levels and freight rates; and (d) breaches section 47.1 of the Canadian Wheat Board Act”.

The House resumed consideration of the motion that Bill C-18, An Act to reorganize the Canadian Wheat Board and to make consequential and related amendments to certain Acts, be read the second time and referred to a committee, and of the amendment.

Business of the House

[Joe Comartin, NDP, Windsor—Tecumseh, ON]

Mr. Speaker, I was hoping you would go ahead with the point of order so that when I made my points it would be somewhat quieter in the room.

It is my first question as the House leader for the official opposition. I want to thank the leader of the New Democratic Party of Canada for placing her confidence in me to take on this role.

I would also like to note that as the deputy House leader, I had the opportunity to sit in many meetings with the current government House leader and the current House leader of the Liberal Party. From those experiences, I expect that we will work out a co-operative, collegial relationship. We will not always agree, but I believe we will attempt our best to make this Parliament work for all Canadians.

I would like to ask the Leader of the Government in the House of Commons about his plans for next week. We know that the government has decided to cut off debate on Bill C-18 on Monday and that there will be an NDP opposition day on Tuesday. What other bills does the government intend to have us debate for the rest of the week?

Canadian Wheat Board

[Bob Zimmer, Conservative, Prince George—Peace River, BC]

Mr. Speaker, local grain farmers in my riding, such as the BC Grain Producers Association, have made it clear that they want the same marketing freedom and opportunities as other Canadian farmers. Our nation's grain farmers feed the world, and they deserve the opportunity to decide when, where and how they sell their product.

With the introduction of Bill C-18, we no longer would see those same western Canadian grain farmers go to jail for selling their grain across our borders. Our Canadian government believes in marketing freedom for all Canadian grain farmers. I, for one, am in full support of our legislation to reorganize the Canadian Wheat Board. I hope all of us in the House will support the bill. It all can be summed up into one word: “freedom”.

Second reading

[Frank Valeriote, Liberal, Guelph, ON]

Mr. Speaker, the member for Edmonton—St. Albert questioned the ideology of the member speaking. It is better that the member speaking wear that ideology on his sleeve than have it spread all across Bill C-18 the way it is now by the government.

The Alliance Grain Traders announced last week that it will invest $50 million to build a pasta plant in Saskatchewan. Could the member speculate as to why it would do that? Could he comment as to whether the AGT expects the price of grain to go up, go down or stay the same?

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Mr. Speaker, of course it will. I thank the member for her question. She makes a huge contribution to this House and I am pleased that she is here.

In Australia, the situation is quite clear, the numbers do not lie. When Australia eliminated this mechanism that protects farmers, the family income of wheat growers dropped. Wheat producers in the United States have been at a serious disadvantage because there is nothing like the Canadian Wheat Board in place there. And it is perhaps because Canadian farmers are more prosperous than U.S. farmers that the Americans have lobbied against the Canadian Wheat Board for years.

What will happen if the Canadian Wheat Board is dismantled? No one knows how far family incomes and the indirect income of the entire community will fall. The Conservatives do not know. They did not commission any studies. They have no idea of the impact that this will have. However, we can predict that the impact will be very detrimental, very negative and substantial. For that reason we are fighting Bill C-18.