Agriculture Committee on Oct. 25th, 2006

[The Chair, Conservative, Gerry Ritz]

Mr. Horner.

[Doug Horner]

I don't have to submit any documentation. If you want to know whether the Canadian Wheat Board could operate right next to a separate system, all you have to do is look at Ontario. Ontario is not part of the Canadian Wheat Board designated area. And every year, it exports about a million tonnes of wheat. Now, to suggest that somehow Ontario is ruining the Canadian Wheat Board is ludicrous. And to suggest that Ontario wheat is branded differently than Canadian Wheat Board wheat is just as silly.

If you're saying that Manitoba and Saskatchewan want to lock their producers into servitude to an export trading company that ships all of their grain offshore, I think Alberta would certainly be able to handle that. We would probably handle it in an open and free market system, as we have always done in the past, which is why we are as prosperous as we are today. I don't have a problem with that.

[The Chair, Conservative, Gerry Ritz]

Ms. Wowchuk, a final point on that.

[Rosann Wowchuk]

You asked whether the Wheat Board could continue to operate in a free market system. I don't think so—not in the system we have right now, without control of any assets. The Australian Wheat Board had to make some adjustments, but they have assets. Our Wheat Board does not have assets, so they would be at the mercy of the grain companies. I don't think they could survive like that for long.

If you compare Ontario and western Canada, they are very different. There's a great divide. In Ontario they grow very little hard red spring wheat. They grow soft wheat, and most of their wheat is consumed in the domestic market. The volumes of wheat grown on the Prairies could not be consumed in the domestic market. We will always be exporters, either of raw wheat or a value-added product. Certainly within the Wheat Board we can value-add.

[The Chair, Conservative, Gerry Ritz]

Mr. Bezan.

[James Bezan, Conservative, Selkirk—Interlake, MB]

Thank you, Mr. Chair.

I want to follow up on some of the comments that have been made about the statistics. We throw around percentages, and we need to have some hard facts. If you start looking at the United States or the Ontario situation and do a comparison, maybe on a percentage basis of growth, it's not there because it's already a mature industry. If you look right now, Saskatchewan is only processing 5% of their coarse grains--only 5%. Compare that to Ontario, which is 117%. That means they're bringing in grain. It's a very immature industry, they're processing everything and then some. We have to put the numbers in perspective, Mr. Chair.

I asked our research team to coordinate the information coming in and fill in the holes when we compare it to other regions outside the Wheat Board area. I'm also surprised that Alex made the comment that minority rights don't matter. He's pretty much saying the majority should rule over the minority, and I think that's contrary to NDP philosophy, so I'm rather shocked by that.

I want to come back. Minister Wowchuk, you're talking about having a plebiscite in Manitoba. The Government of Canada has never said we're opposed to a plebiscite. Right now you guys are jumping ahead, you're trying to run out the door and you forgot to open the door. You're banging your heads now because we aren't at the point yet to know where we're at with the decision on moving ahead on the marketing choice, and what the question might look like. You guys are getting ahead of yourselves, so we have to take a step back.

You did mention you want to go ahead with the plebiscite in Manitoba. Do you believe that all agricultural policy in Manitoba should be decided by a plebiscite?

[Rosann Wowchuk]

If you listened to producers, Mr. Bezan, producers across the country have been calling on your government to give them a plebiscite. We have clearly said we want the federal government to call a plebiscite with a true, meaningful question. If you won't put that question to the producers, we will give the Manitoba producers a choice. This is not the first time it has happened. Alberta held a vote, Manitoba held a vote on the Wheat Board in the fifties, and they're prepared to do it again if you won't.

[James Bezan, Conservative, Selkirk—Interlake, MB]

To follow up, a plebiscite on a federal policy in Manitoba would not have any legality, but I can tell you, if you want plebiscites, you guys moved ahead this year with a cattle tax in Manitoba and the producers were asking for a plebiscite then. A lot of those producers came to me, and I never saw any question about the farmers. I'm a cattle farmer and I never got a chance to vote on whether or not I wanted this head tax.

If you want to be useful having a plebiscite on something, if you want to gauge the response of producers in Manitoba, I suggest you start listening to them on safety nets. The CAIS program is widely hated out there. Everywhere I go, farmers are telling me CAIS doesn't work, and you're at the front of the line cheerleading for the CAIS program. Let's have a plebiscite in Manitoba to see whether or not that safety net is serving the farmers well.

[Rosann Wowchuk]

Mr. Chair, I will tell Mr. Bezan that he's part of government. Producers are asking for changes to CAIS, but what producers are asking for are true changes to CAIS. What you are proposing now are not true changes. They are changes that were made under the Liberals, Mr. Chair. True change is not being proposed here.

[James Bezan, Conservative, Selkirk—Interlake, MB]

Just as a point of order, Mr. Chair, we are trying to move ahead with changes to the CAIS program, but every time the government talks to the provincial governments, they don't want to move on the issue.

[Mark Wartman]

That is absolutely not true.

[James Bezan, Conservative, Selkirk—Interlake, MB]

They're not listening to producers at all. One of the things you campaigned on is that there was choice provided in the marketing involvement in Manitoba and you said you're going to reverse that decision. That hasn't happened. We still have a choice in marketing hogs, and you were going to bring back the monopoly on hogs in Manitoba.

[The Chair, Conservative, Gerry Ritz]

Ms. Wowchuk, please.

[Rosann Wowchuk]

Mr. Chairman, if I could add to this, first of all Mr. Bezan is inaccurate when he says the federal government is trying to make changes to CAIS but the provinces won't. The federal government wants to change the name of CAIS. I'm not prepared to change the name of CAIS if there isn't real change to the program. In fact, the provinces have agreed to changes, changes that were proposed under the previous government. Some of those changes are being made.

With respect to the hog industry, I said if the producers wanted a change back to single-desk selling we would make that change. Producers have not asked for that change. I always listen to producers.

[James Bezan, Conservative, Selkirk—Interlake, MB]

Mr. Chair, I just want to say that the comments linking the Wheat Board discussion to supply management is completely inaccurate. This government supports our supply management industries. There is a huge difference between supply management and a monopoly single-desk seller. Supply management guarantees a price to farmers. They know what they're getting, they can plan for that. We support it 100%. I support it, so do all the producers we have in Manitoba and across Canada in that industry. That's the difference between it and the Wheat Board. The Wheat Board doesn't control supply. It doesn't manage the end market use as well. There are some huge issues and a huge difference, and that's why we're having this discussion.

[The Chair, Conservative, Gerry Ritz]

Thank you.

We'll have Mr. Boshcoff for five minutes, please.

[Ken Boshcoff, Liberal, Thunder Bay—Rainy River, ON]

Thank you very much.

My questions will be primarily to Manitoba and Saskatchewan, as they relate to the port in the St. Lawrence Seaway a bit more than the Alberta government does. I have three questions.

First, this is probably the first time you've seen Churchill and Thunder Bay, along with Vancouver and Montreal, expressing their concern about the destruction of the Wheat Board with regard to what can happen, particularly to the marine industry. The immediate demise of the port system and marine transportation and the seaway are of obvious concern to people in my riding and all the way down through eastern Canada.

Second, with the destruction of the Wheat Board, what would possibly happen to the railcar system that currently exists if it indeed becomes a north-south system as opposed to an east-west Canadian system?

Third is something that.... In an earlier life, I was the director of marketing for the Port of Thunder Bay. I'm well aware that in Regina, in Saskatoon, and at the University of Manitoba in Winnipeg, there are a large number of research facilities, and indeed head offices and grain company offices. With the destruction of the Wheat Board, even from the Vancouver point of view, are you fearing that things will happen, that instead of going to Vancouver they will go to Seattle, and instead of going to Winnipeg and Saskatoon they will go to Minneapolis and Saint Paul?

Those are my three questions. Thank you.

[Mark Wartman]

Are you asking either one of us?

In terms of the ports and the potential impact of removing the Canadian Wheat Board, I think, again, that one of the things we have to keep in mind is that as traders--and we are traders--we need to get the maximum return for our producers. In terms of where and how we will market if we don't have the Canadian Wheat Board doing the marketing, I suspect that it will be where those markets are, and if that means a north-south corridor, it could have huge impact.

Today, because of single-desk marketing and the way that operates, I think we see significant activity in our east-west ports. Would that be impacted? I don't have the data to make an accurate statement, so I'll simply say that it's something I think we would have to look at carefully. The primary focus for us is making sure that whether it is commodity or value-added, we sell into the best markets for the best return.

What are the potential impacts on rail? Well, I think all of us at this table, at various times and at various levels, have been very clear that we want significantly better rail service. We have seen a real, large abandonment. We have supported producer short lines. They will be at serious risk without a Wheat Board because of the way grains are marketed. Not only that, we still have some very serious concerns about rail and running rights, which we have brought forward at times to say that there needs to be competition, there needs to be level of service, and there needs to be dispute reconciliation that is much faster and much more producer oriented.

I think we stand together on pieces like that, very clearly. I'm concerned, given what we've seen from the board, that if they are not marketing, we will see some serious impacts on the infrastructure that has been invested in to date to try to compensate for some of the activities of the major railroads.

[Rosann Wowchuk]

I raised the issue of Churchill because I believe that without the Wheat Board, Churchill will be devastated. Ultimately, it's about getting the farmers the best return for their product, and the sales through the Port of Churchill certainly help the producers of that catchment area. I think there will be a more serious negative effect on Churchill than there will be on Thunder Bay and Vancouver, because Thunder Bay and Vancouver have grain terminals. They don't have any at Churchill. So I think the most serious effect would be on the Port of Churchill.

You ask about what would happen, where the head offices would go, and will there be an impact. I think this is something that has to be considered as well. If you think about how Manitoba Pool Elevators and Alberta Wheat Pool came together, they formed Agricore United and they put their head office in Winnipeg because that is where the Canadian Wheat Board was. If you don't have the Wheat Board--and there are many head offices there--I think you will see these head offices move out.

There are other institutes, such as the Winnipeg Commodity Exchange, the Canadian Grain Commission, and the Canadian Grains Institute, that play a very important role in marketing, in the development of products, and in working with our customers. We don't know what the future of those institutes will be. I think we have to look at all of those and take all that into consideration.

The issue of transportation is one we're all concerned about, and producer cars, and all of those issues.

[Doug Horner]

Mr. Chairman, Mr. Boshcoff, the suggestion is that if you had, as you put it, the “destruction of the Canadian Wheat Board”, which I disagree with....

The vision we have is of a new entity coming out of this. It's a new generation cooperative type of structure that actually has contracts with those independent line companies and perhaps even owns a piece of one of the terminals that are currently available on the west coast. That gives them the assets and all those other things. But I would suggest this to you. If your concern is that the only reason these port facilities are being utilized now is that some sort of subsidy is being given to them by the Canadian Wheat Board, that is kind of at odds with the ability for them to give the farmers the best deal.

If the best return to the producers is to go through Churchill, they should go through Churchill. If the best return to the producers is to go through Thunder Bay, they should go through Thunder Bay. I would argue that they probably are doing that because it is a good port. If the best return to the producer is through Prince Rupert, which is a day and a half closer to the Asian marketplaces that we want to hit with value-added products, then that's where they should go.

So I'm curious about the argument. I don't have facts, but the logic would say to me that if they're getting the best deal for producers today, there should be no concern. The market will dictate that they're going to go where the best efficiencies are.

[Ken Boshcoff, Liberal, Thunder Bay—Rainy River, ON]

My concern is a collapse of the infrastructure caused by dismantling the existing structure that seems to be working for smaller people to be able to access cars and those types of things.

[Doug Horner]

I believe this would actually add to that, because those small line companies are looking for partners. I should say that I know very well several of the independent grain companies in our province and several of the independent grain companies that operate in some of the other provinces. I can tell you that they are looking at this type of an establishment in a positive way. That includes a terminal in my own constituency that is owned 100% by producers—well, not anymore; they have to join venture partnership now. It was started 100% by producers in our area, and they are looking forward to opportunity.

[The Chair, Conservative, Gerry Ritz]

Mr. Roy, you have one minute.

[Jean-Yves Roy, Bloc, Haute-Gaspésie—La Mitis—Matane—Matapédia, QC]

Thank you, Mr. Chairman.

I'd like to draw some conclusions, because we will be called upon to vote.

[The Chair, Conservative, Gerry Ritz]

These folks have airplanes to catch.