Evidence of meeting #9 for Agriculture and Agri-Food in the 39th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was cwb.
10 a.m.
Conservative
The Chair Conservative Gerry Ritz
Thank you, gentlemen, for your presentations here today.
Our first segment of this meeting has now come to a close and we will suspend for just a couple of minutes, so stay tuned while we change our witnesses at the end of the table.
Thank you.
10:07 a.m.
Conservative
The Chair Conservative Gerry Ritz
Ladies and gentlemen, if we could get everyone back to the table, we'll continue on with our second hour. Time always flies by and we never have enough.
With us for the second hour we have the Canadian Grain Commission and Chris Hamblin, no stranger to the committee. Welcome. You also have someone with you.
Mr. Harasym, welcome.
From the Western Grain Elevator Association, we have Wade Sobkowich, executive director, and John Heinbecker, chairman. Welcome, gentlemen.
From the Western Canadian Wheat Growers Association, we have Stephen Vandervalk, vice-president, and Blair Rutter, executive director. Welcome.
If each one has opening statements, we'll proceed with that. We'll start with Chris, if you would, please, and try to limit them to ten minutes or less. As you can see, our questioning time runs out very quickly, so if you would care to begin....
10:07 a.m.
Christine Hamblin Chief Commissioner, Canadian Grain Commission
Thank you, Chairman. It's indeed a pleasure to be here with you and with the standing committee members.
Just to give you a little background, Terry and I are two of the three commissioners at the Canadian Grain Commission. I'm from Manitoba and actually have a farm just south of Winnipeg with my husband. Terry is from Saskatchewan, and our third commissioner is Albert Schatzke, from Alberta. So the three commissioners represent the three prairie provinces.
Mr. Chairman, standing committee members, and honoured guests, it is certainly a pleasure to be here to provide you with some information about the Canadian Grain Commission and to answer some of your questions.
Today I'm going to focus on our mandate, some of our current activities and priorities, and also address some of the challenges that we are facing.
First of all, the Canadian Grain Commission administers the Canada Grain Act. The Canada Grain Act was established in 1912 by legislation and it is the act we have been following since that time. Our mandate as set out in the act is in the interest of producers to establish and maintain standards of quality for Canadian grain and regulate grain handling in Canada to ensure a dependable commodity for domestic and export markets.
The Canadian Grain Commission's responsibilities as a neutral third party in quality and quantity assurance for 21 different grains are very distinct from those of any marketing organization. Our mandate supports the Canadian oilseeds, cereal, and special crops sectors to compete in a rapidly changing international marketplace.
The Canada Grain Act has been modified on a number of occasions, but not significantly since the early 1970s. As many of you are aware, there is an independent and comprehensive review currently under way and the recommendations are to be presented to the Parliament this fall.
We look forward to working with both the minister and the government to ensure that the Canadian Grain Commission is well positioned to have a quality and quantity assurance system that works well for both producers and the industry.
The Canadian Grain Commission's top priority is the delivery of mandated services and regulatory responsibilities assigned to us under the Canada Grain Act. This includes quality assurance, quantity assurance, research, and producer protection. Quality assurance begins with the setting of standards for the inspection of grain. Our scientists and inspectors work very closely to develop standards that reflect the end use quality our customers have grown to expect from each grade. This consistency is important to customers and helps with the marketability of Canadian grain.
Quality and quantity assurance also includes the inspection and weighing of grain as it arrives at port and is subsequently loaded to vessels. Our research also includes finding better ways to evaluate grain quality. This enables us to move from subjective testing to more objective tests. Two examples that are currently under way right now are falling number to replace sprout count and chlorophyll to replace the green count in canola. Another very important function of the research that we're doing is the testing and monitoring for grain safety. The demand for these assurances has increased exponentially in the last few years.
The underlying principle of the Canada Grain Act is to ensure fair grain transactions. This is a very important aspect for producer protection. Two other aspects of producer protection include the licensing and security component and the allocation of producer cars.
I'll tell you a little bit more about the licensing enforcement and licensing and security component. Under the Canada Grain Act, any enterprise buying western grain and incurring a liability to producers must be licensed and post security with the Canadian Grain Commission. The security is intended to compensate producers should they deliver grain to an enterprise that is then unable or unwilling to pay the producer or to return the grain.
The past 15 years have been characterized by the emergence of many smaller grain dealers who went into business to market the increasing production of special crops. These companies tended to avoid licensing and security requirements, feeling that the demands involved affected their working capital position. The Canadian Grain Commission used moral suasion rather than the Canada Grain Act to encourage these enterprises to become licensed, but the results have been very mixed.
Work has been going on for some time to find better solutions, and recently work done by some of the provincial pulse organizations, including producer organizations and industry groups in western Canada, concluded that although the present system of security and licensing was not perfect, it was the best available and licensing and security requirements should be enforced.
Therefore, as of August 1 of this year any enterprise incurring liabilities to producers through the purchase of western grains will be required to be licensed and secured or exempted. The Grain Commission has diligently communicated all of the details of this initiative to industry and producers across the prairies.
The next initiative I would like to talk about is the wheat quality-assurance strategy. For many years, grain handlers and the Canadian Wheat Board have relied on kernel visual distinguishability, or KVD, as a cost-effective segregation and marketing tool for assuring quality of milling wheats. Steadily increasing demand for non-milling wheats destined for the feed and ethanol industries prompted the CGC to launch an extensive consultation in an attempt to find alternatives to processes that were in danger of becoming outdated.
As a result of several initiatives over the past few years, we have developed a three-part strategy. The first part is our variety ID research. We have allocated significant resources at the Grain Commission to continue research into variety identification. We are making some great progress, but the testing continues to be very much a lab-based test. Although we are striving for a quick driveway test, we feel it will be some time before we can accomplish that kind of testing; therefore, we still need to look for other ways to segregate grain.
Our second point in the strategy is to continue monitoring for ineligible varieties in our shipments. We monitor rail cars and vessels to ensure that we maintain the integrity of our wheat shipments.
The third part is the development of a plan to establish a general-purpose wheat class for non-milling wheat. This would include varieties that would be suitable for feed, ethanol, or perhaps other industrial uses.
Our plan is to protect the KVD requirements on our Canadian western red spring and our Canadian western amber durum, as these are both very high-premium markets and make up about 85% of the current production in western Canada. We plan to increase the flexibility for breeders for the ethanol or feed, this general purpose class, by creating some flexibility using the kernel types of the minor classes, and we are hoping that we'll be able to announce more details on that in the very near future.
The next issue I thought I'd like to address with you is with regard to finances and service provision. Certainly we have had a number of challenges in this area. Our revenues have steadily declined over the last number of years. Part of this is a result of the shift in production. With the demise of the Crow subsidy, producers have looked for lower-volume, higher-value grains to produce in order to ship fewer tonnes for export. As a result, there has been an increase in special crops. But for the Canadian Grain Commission a lower volume means less revenue, because our revenue is based on the inspection and weighing on a per-tonne basis of product going into the ports and again as it's loaded onto vessels. Our revenues have declined because of grain volumes.
We have also had a decline in revenues or a problem with revenues as a result of our fees. Our fees on services have not risen since 1991, so we're operating under the fee schedule of the 1991 timeframe. So you can see why our revenues are declining. At the same time, our costs have continued to climb, largely because of inflation and because of the contract settlements we have with our staff.
This has meant a growing discrepancy between revenues and expenses, and the difference between these two has been accommodated by a series of interim appropriation dollars over the last number of years, the last two years being $21 million for the 2005-06 year, and $30 million for the 2006-07 year. A $30-million appropriation, along with the revenues we'll generate, will give us a budget of about $70 million. We feel this is a doable budget, but it's going to be very tough. We're going to be keeping a careful watch on our expenditures, but it is going to make things a little bit difficult.
We intend to do our very best to manage within these anticipated revenues. We have done some streamlining, we are focusing on our mandated services, and we are working with industry to best meet their needs. Obviously, it would be very nice if we could provide services on demand at all times, but this would require staffing to peak levels which would mean staff at other times would have nothing or very little to do. We do not feel this is reasonable, given the high cost of that type of staffing.
Instead, we have encouraged industry to work very closely with our managers to alert them to the need for services. With this, we anticipate having very minimal problems providing services. That doesn't say there won't be times when it will be difficult.
In conclusion, I would like to say there's no question the industry is changing. We are facing numerous challenges, both as the Canadian Grain Commission and as an industry as a whole. We are seeing quality is continuing to be very important, and likely more important now than it has ever been in the past. The Canadian Grain Commission's research and quality assurance forms the cornerstone of the Canada brand for Canadian grain. It protects the reputation of Canadian grain, it bolsters international competitiveness, and it assists producers in industry to better meet customer needs.
I thank you, Mr. Chairman, for the opportunity to present to you and to the standing committee members. It is a pleasure to share information with you, and we look forward to your questions.
10:20 a.m.
Conservative
The Chair Conservative Gerry Ritz
Thank you, Ms. Hamblin.
We'll move to the Western Grain Elevator Association. Wade.
10:20 a.m.
Wade Sobkowich Executive Director, Western Grain Elevator Association
Thank you, Mr. Chairman and members of the committee, for inviting the Western Grain Elevator Association to speak to you about issues of importance to our industry.
As you mentioned, I'm Wade Sobkowich, and I'm executive director of the WGEA. To my right is John Heinbecker. John is vice-president of Parrish and Heinbecker, a 100-year-old, family-owned and family-operated Canadian grain company. John is going to talk to you about issues important to the WGEA.
10:20 a.m.
John Heinbecker Chairman, Western Grain Elevator Association
Thanks, Wade.
As you may or may not know, the WGEA is an association of eight farmer-owned public and private grain businesses operating in Canada, which collectively handle in excess of 90% of western Canada's bulk grain exports. Our members own grain-handling facilities throughout the country and in the ports of Prince Rupert, Vancouver, and Thunder Bay.
There are three critical areas of policy that we would like to discuss today. The solutions we are proposing are fundamental to Canada's long-term success in the world grain trade. They are as follows: the future of wheat and barley marketing in western Canada and the dispute resolution with the Canadian Wheat Board; changes to the Canadian Grain Commission and the Canada Grain Act; and changes to the Canada Transportation Act.
On the future of wheat and barley marketing in western Canada, the role of the Canadian Wheat Board as it pertains to the marketing of wheat and barley has been the subject of much discussion and debate over the past months. As companies with significant investment in the industry are keenly interested in the future of wheat and barley marketing in western Canada and are prepared to accommodate whatever future the government decides upon, we only ask that you attempt to minimize, as best as possible, any uncertainty, because the types of changes being discussed are significant, and long-term uncertainty can cause the industry to destabilize or stagnate.
The most important point we can emphasize here—and it's critical that we all understand it—is that the interests of the WGEA and farmers are not in conflict. Our overall objective is to make the industry more profitable. This includes farmers. There is a false notion that agricultural policies must take the approach that farmers and grain companies have naturally conflicting objectives, when in fact we cannot be profitable if the farmers are not profitable.
WGEA members currently market wheat, barley, canola, special crops, other grains and oilseeds to almost a hundred countries around the world. We would be fully prepared for the future if the Government of Canada decides to implement changes to the system.
Regardless of how the crop is marketed and sold, grain companies have a job to do, whether acting as a direct agent of the Canadian Wheat Board, or in direct partnership with farmers in meeting end-use customers' needs. Grain companies are looking forward to handling as much wheat and barley as farmers produce within a competitive marketplace. If changes are coming—and we want to reiterate this—we are fully committed to participating in the development of a new framework for the future.
We of course understand that this process could take some time, which leads us to the second part of this segment. Unfortunately, our business relationship with the Canadian Wheat Board has some serious problems that cannot wait and must be addressed immediately. Our solution to these problems is via the adoption of a dispute resolution mechanism. Grain companies and the Canadian Wheat Board have to negotiate a number of different agreements and arrangements. In some cases we are able to reach agreement and in some cases we are not.
In those instances when we cannot agree, the Canadian Wheat Board proceeds as it sees fit--that is, unilaterally. There is no third party to go to or other avenue of appeal for grain companies; we simply have to live with the Canadian Wheat Board's decision.
For example, the handling agreement the Canadian Wheat Board has with its agents is the 1999 version, much of which is outdated and irrelevant. The outdated agreement continues to be extended under duress due to the fact that we cannot reach resolution on a new agreement. Our members would have obviously had the option not to sign the agreement, and therefore not handle Canadian Wheat Board grain, but this would not be an economically reasonable solution and would cause distress to farmers who grow Canadian Wheat Board grain.
By way of background, the Canadian Wheat Board is virtually the only monopoly in Canada without some form of regulatory oversight mechanism. There is a concern that the Canadian Wheat Board uses its statutory power in a manner that is inconsistent with reasonable standards of commercial behaviour. We are seeking a mechanism to counter potential abuse of dominance and promote reasonable standards of economic commercial behaviour.
To provide an unbiased determination, we have proposed a two-level arbitration system. If the Canadian Wheat Board, or one of its agents, has a dispute requiring a resolution, the issue would first be taken to an independent arbitrator to determine if the challenge would or would not contravene the Canadian Wheat Board Act or regulations. The item under dispute could only proceed to the second phase of arbitration if the arbitration in the first phase rules that, regardless of the outcome, it would not contravene any law. We believe this to be a fair and expedient way to resolve the handling agreement and to implement dispute resolution, while putting some parameters around what can and cannot be arbitrated.
We've approached the Canadian Wheat Board with this concept of dispute resolution on a number of occasions; however, they have tried to limit the discussion to only certain items. Dispute resolution is a fundamental governing principle in the world of business, trade, and commerce. It is used so parties have a reasonable option for resolving issues other than lengthy and costly court proceedings.
The existing process is unacceptable, in the context of normal commercial relationships, as having significant detrimental effects on the industry. We retained specialists who have explained to us that the government has the ability to enact appropriate provisions in the Canadian Wheat Board Act, or enact regulations by order in council, or issue directions.
Section 18 of the Canadian Wheat Board Act provides that cabinet “may, by order, direct the Corporation with respect to the manner in which any of its operations, powers and duties under this Act shall be conducted, exercised or performed.”
The WGEA firmly believes that a dispute resolution process is required. To be clear, we do not intend that the arbitration process would be used to replace discussions or negotiations, nor to contravene anything in the Canadian Wheat Board Act. It is not intended to give the handling companies any advantage over the Canadian Wheat Board. It is only to be used for a fair, impartial decision, if needed, following an attempt to resolve a matter through good-faith discussions and negotiations.
We feel that both sides would be much more inclined to reach a cooperative resolution with the existence of a chance that each side could lose at arbitration. The changes we are suggesting would be positive and would stimulate respect and collaboration.
Next I will discuss a review of the Canadian Grain Commission and the Canada Grain Act:
With respect to the current review of the Canada Grain Act and the Canadian Grain Commission, the WGEA was very supportive of the government's decision to hold such consultations. The act was written approximately 100 years ago and hasn't changed much since that time. An overhaul is long overdue, and we want to thank the committee for ensuring that the review of this act was initiated.
We have called for and supported this review because fundamental reform to the Canada Grain Act and the Canadian Grain Commission is essential for competitiveness today and in the future of Canada's grains, oilseeds, and special crops. Failure to move forward on the necessary reforms has placed Canada at a competitive disadvantage. We've seen the COMPAS report and, to say the least, we are very disappointed. We have some serious concerns about the directions it proposes. The need for fundamental reform and the consequences of failing to modernize Canada's regulatory system are absent from their initial document; rather, they appear to be favouring minor tweaks to the existing system.
As grain handlers, we absolutely support the involvement of the CGC with the mandate to help assure the integrity of Canadian grain. It is vital that the industry evolve in response to requirements of customers and consumers. It is equally vital that our regulators make every attempt, in consultation with industry, to do the same. As expressed in our detailed comments to both COMPAS and to the Standing Committee on Agriculture and Agri-Food in the past, the WGEA saw a real opportunity to make changes.
We were very discouraged to find that the COMPAS report either overlooked outright or dismissed the vast majority of the issues, concerns, and solutions offered. Their initial discussion document will not provide the required direction or framework for future consultations. The lack of understanding of the need for reform and the lack of direction demonstrated in the initial document will make it difficult for COMPAS to deliver a meaningful, comprehensive final report.
Again, we were under the impression that the review would result in a serious overhaul of this 100-year-old piece of legislation. Since the COMPAS report only identifies minor tweaks to the system, the public will not have the opportunity to comment on more fundamental changes.
We're not sure whether this committee also envisioned more than just minor tweaks when you mandated the review, but if you did, we would suggest and recommend that you invite COMPAS to appear here to outline why they have reached the conclusions they have.
In summary, the following changes need to be made to the CGC and the Canada Grain Act: first, the mandate should be revised to clarify that the CGC is the impartial adjudicator of the industry and to recognize the interests of grain producers are also served by having a healthy and vibrant grain-handling sector.
Second, either a business model or a government model should be adopted. If a business model is selected, it should be one of the CEO reporting to a board of directors. If a government model is selected, the CGC's status as an independent agency should be eliminated, and it should be incorporated directly into Agriculture and Agri-Food Canada.
Third, the primary function of the CGC should be to continue to establish grades and the standards for those grades, taking into account primarily customer demands and market conditions. Licensing should be the secondary function. The focus of licensing activities should be the maintenance of Canada's quality assurance system. Otherwise, the remaining functions and activities should either be eliminated or moved under AAFC.
There have been a number of reviews of the CGC, dating back to 1998. Each report has suggested many recommendations. However, few, if any, have ever been adopted and implemented by the federal government. Considering the flavour of COMPAS's report thus far, the WGEA is very concerned that the COMPAS review will once again fail to deliver the much-needed reform for our industry.
Finally, the Canada Transportation Act is the third area of fundamental change. On May 5 we met with the office of the Minister of Transport, Transport Canada, and other shippers and stakeholders to discuss the types of changes that should be made. This was a monumental task, but for the first time in history there was consensus among a significant number of shippers, stakeholders, and government officials. The changes we expect in the next rail freight bill will be beneficial and important to the grain industry. We're fully supportive of the process, and we thank the Minister of Transport for his leadership and guidance.
Provided this bill includes consensus from the May 5 meeting, we believe it would be a move in the right direction. We feel this bill is an important first step with respect to a number of outstanding issues for the whole rail-shipping community.
In due course, we look forward to a review of the level of service and balance of accountability between shippers and railways, which will be the next critical step more specifically designed for the grain industry. We encourage the government to act quickly to pass this bill so we can build on these changes.
In conclusion, traditionally Canadian western agricultural policy has pitted individual industry participants against each other, rather than fostering an environment of cooperation and partnership. Old deep-seated feelings of suspicion and fear, born in a far different world many decades ago, have been entrenched because our policy has not changed to reflect the new realities. This entrenchment has damaged Canada's competitiveness. Everything you have heard here today, and there is so much more, is designed to unravel the old biases in favour of a modern, balanced, reactive, efficient system, where all players push in the same direction towards the same common goal.
Thank you.
10:30 a.m.
Conservative
The Chair Conservative Gerry Ritz
Thank you, John.
We'll move to the Western Canadian Wheat Growers Association. Stephen, please proceed. Thank you.
10:30 a.m.
Stephen Vandervalk Vice-President, Western Canadian Wheat Growers Association
Thank you, Mr. Chairman.
Thank you to the committee for this opportunity to appear before you.
My name is Stephen Vandervalk. I'm a farmer from Fort Macleod, Alberta, and I'm the Alberta vice-president of the Western Canadian Wheat Growers Association. With me today is Blair Rutter, our executive director. We were initially invited to speak to the Canadian Wheat Board, so that's where our introduction will proceed.
We are here today to discuss our proposals for reforming the Canadian Wheat Board into an effective marketing tool for prairie farmers. We are building on a proud tradition. For the past 36 years, the Wheat Growers have been at the forefront in advocating many positive changes at the Canadian Wheat Board, including protein grading, a separate pool for durum wheat, freeing up of the feed-grain market, changes in governance, pool return outlooks, and forward pricing options. We see marketing choice as the next logical step in the Canadian Wheat Board's evolution.
We provided the committee with a position paper on the Canadian Wheat Board that our association prepared in March. I wish to provide a few highlights from that paper. What we were seeking is simply the same marketing freedom that is available to Ontario farmers. Quite frankly, we do not understand how farmers in one region of Canada can have the right to market their grain to whomever they please, whereas farmers in another part of Canada are denied that right.
The Ontario Wheat Producers' Marketing Board started to loosen its grip over its provincial monopoly in 2000 and granted full marketing freedom in 2003. Since 2000, wheat acreage in Ontario has increased significantly. In fact, last fall Ontario farmers planted a record amount of winter wheat. By almost all accounts, the Ontario experiment with dual marketing has been a resounding success. We are convinced that model can work as well in western Canada.
The Wheat Growers see tremendous benefits flowing to western farmers once we are free to choose whether to market our grain on our own or through a more focused and effective Canadian Wheat Board. Marketing choice means that farmers will decide for themselves when and where it makes best sense to deliver and sell their wheat and barley. This past year, for example, many farmers watched in vain as their piles of wheat downgraded in value due to lack of delivery opportunity. That's one of the problems of the Canadian Wheat Board monopoly. It assumes one size fits all and that every farmer's storage, pricing, and cashflow needs are virtually the same. That's not the case. Providing marketing choice gives each of us the ability to decide for ourselves the delivery and marketing options that best suit our farm.
We are convinced that marketing choice will also provide farmers with a greater opportunity to lock in profits on wheat and barley. As we outlined in our letter to the committee members last week, in recent months we've seen a rally in U.S. wheat markets. Under marketing choice, we'd have a greater opportunity to capture the prices under this rally. As we pointed out in our letter, we find it disturbing that the Canadian Wheat Board's projected prices have actually gone down at a time when the U.S. prices have climbed significantly.
You're talking about some real-life examples, and I have about three or four, if you want to ask about them later in questions and answers. I have one here on winter wheat. On Kansas versus Minneapolis, the futures for winter wheat are 30¢ higher than red spring wheat. Yet the PRO for spring wheat is $5.63 and the PRO for winter wheat is $4.38. That's $1.30 less for winter wheat when the price should be 30¢ to 40¢ higher. That's one example, and I have more, specifically from my farm, if you want to ask.
The Wheat Growers also believe that freeing up the wheat and barley market will lead to all sorts of entrepreneurial activity, as new investment in value added takes hold. We have seen it happen in oats, canola, and the pulse industry. We are convinced it can happen in wheat and barley too. More processing facilities here at home mean more competitive choices and lower freight bills for farmers.
The Wheat Growers also want to make sure that any prairie farmer who wishes to market their wheat and barter collectively remains able to do so. We are not wanting to take that option away. In fact, we believe many of our members would want to market some of their grain on their own and contract a portion of their grain with the Canadian Wheat Board.
For this reason, we are recommending several structural changes to the Canadian Wheat Board that we believe are necessary to ensure it becomes a strong competitive choice for farmers. We are recommending the Canadian Wheat Board be transformed into a truly producer-owned and -controlled company.
Part of our reason for suggesting this is because the Canadian government has already agreed, as part of the WTO negotiations, to give up the government guarantee of Canadian Wheat Board borrowings and the initial payment. The timeline for giving up these guarantees has not yet been negotiated. However, we are likely to have a few years to undertake the necessary structural reforms and create a capital base.
As discussed in our position paper, we believe the capital base should be formed by allowing the Canadian Wheat Board to retain its existing equity, including the contingency fund, and by allowing farmers to elect whether they wish to invest their portion of interest earnings into CWB shares. We estimate that half of farmers would elect to invest their share of interest earnings with the board.
The Wheat Growers Association is not wedded to any one particular ownership model. The growers would take one of several forms. For example, the ownership model could be a traditional co-op structure, a new generation co-op, or a normal shareholding company. We believe the federal government, in consultation with the CWB board of directors, should determine the ownership model that it believes will allow the Canadian Wheat Board to raise the capital necessary to become a viable, producer-owned and -controlled operation.
The Wheat Growers Association is convinced that the CWB can be transformed into a viable marketing tool for prairie farmers. Of course, there are no guarantees, but the successful transition of the Ontario Wheat Producers' Marketing Board from a single-desk marketer into an effective marketing competitor demonstrates that this can work. The Wheat Growers Association is not seeking preferential treatment. All we ask is that the laws of this land be harmonized so that we have the same rights and privileges that are afforded farmers in Ontario and elsewhere in Canada.
Again, thank you, Mr. Chairman, for the opportunity to present our views here today. We look forward to your questions.
10:35 a.m.
Conservative
The Chair Conservative Gerry Ritz
Great.
Thank you, folks, for those great presentations.
We'll now move to our rounds of questioning. We have roughly 25 minutes left, folks. Do you want to drop to five-minute rounds to get more people in? Is that okay?
All right, five minutes.
Mr. Boshcoff, please.
10:35 a.m.
Liberal
Ken Boshcoff Liberal Thunder Bay—Rainy River, ON
Thank you.
For the grain elevator association, we talked about the working relationship generally being positive, except for this fly in the ointment about disputes. How often do you have those? What percentage of the business dealings is affected by this? Is there a dollar value to it? Is it every day?
10:35 a.m.
Chairman, Western Grain Elevator Association
I couldn't attach a dollar value to it, but I would suggest that it typically takes place with the issues that tend to be the most wide-ranging in the sense that they affect us in the most dramatic forms. It wouldn't occur in day-to-day business for the small, individual workings that are going on between the companies, the daily discussions. They're at a much higher level.
10:35 a.m.
Liberal
10:35 a.m.
Chairman, Western Grain Elevator Association
I'm not sure that you can look at it on a transaction basis. The example I gave was the 1999 handling agreement. That's the single most important document between the grain companies and the Canadian Wheat Board. There was a lot of agreement within that document--it's very complicated and it's very voluminous--but there are three or four critical issues that remain outstanding that we cannot resolve. It's those issues that we're talking about when we say we need to have a dispute resolution mechanism.
10:40 a.m.
Liberal
Ken Boshcoff Liberal Thunder Bay—Rainy River, ON
Okay.
For the western grain growers, is there an overlap with your membership and that of the Canadian Wheat Board? How is your membership composed, and how are you financed versus the Canadian Wheat Board?
June 13th, 2006 / 10:40 a.m.
Blair Rutter Executive Director, Western Canadian Wheat Growers Association
The Wheat Board does not have members. We have members, and they are all voluntary farmer-members who pay an a membership fee of $150 per year. That's largely how we're funded.
10:40 a.m.
Liberal
Ken Boshcoff Liberal Thunder Bay—Rainy River, ON
Do you envision that there actually could be...? Would you do essentially the same job as the Canadian Wheat Board, or are you going to compete with it as a functionary?
10:40 a.m.
Vice-President, Western Canadian Wheat Growers Association
No, we're just an organization that represents farmers. With the dual marketing, a farmer would do his own marketing. Some farmers are good at production; some farmers are good at marketing. But it doesn't matter if you're good at marketing, because you can't use those skills. All you can do is grow wheat and hope they do a good job for you. So that job would fall to each individual farmer.
10:40 a.m.
Liberal
Ken Boshcoff Liberal Thunder Bay—Rainy River, ON
Okay.
Because we're down to five minutes, I have to move quickly around these.
First, to the Grain Commission, in terms of servicing and your concerns about the maritime industry, various grain companies have talked about this on-demand section. You've explained the financial aspects of it. What can you do to be more efficient in terms of consolidating inspections or doing things by train, by lot size, or something? Is there a way you could actually show the companies that you could do it if you had agreement or concurrence with them?
10:40 a.m.
Chief Commissioner, Canadian Grain Commission
We have looked at some ways of increasing efficiencies. Certainly composite grading is one. Instead of grading each car that's coming in, grade them in car lots of 10, 15, 20, or whatever--in different sizes. That would create significant savings. We have also talked with the industry about doing a rough grade, highlighting some of the key factors and providing more detail at a later date.
We haven't moved on any of those initiatives because we haven't received industry support for them, but there are some things that can be looked at. Certainly the review that is under way right now is looking at some other broader initiatives, as well.
10:40 a.m.
Liberal
Ken Boshcoff Liberal Thunder Bay—Rainy River, ON
Mr. Heinbecker, with the Canada Transportation Act changes, do you see improvements to utilizing the Great Lakes and St. Lawrence Seaway system, or do you see a change in transportation from east-west to north-south?
10:40 a.m.
Chairman, Western Grain Elevator Association
From a grain perspective, it's not necessarily going to help the use of the St. Lawrence system. I think the increased use with respect to grain shipments directly relates to where the markets are at that time. We've seen obviously a reduction in the use over time, mainly because the Canadian markets have moved from the east to the west and to the Asian market. I think that trend is still there, and in my opinion it's likely to continue.
Having said that, I think in the case where there is rail reform and the opportunity to move more grain, it always provides us with an opportunity or a chance to have another look at those different ports and outlets.
10:40 a.m.
Conservative
The Chair Conservative Gerry Ritz
Thank you, Ken.
Moving to Madame DeBellefeuille, five minutes, please.
10:40 a.m.
Bloc
Claude DeBellefeuille Bloc Beauharnois—Salaberry, QC
Good morning. Thank you for your presentation.
I'm not a farmer, I'm a Member of Parliament. I've listened closely to all of the witnesses who have spoken this morning, and I've also read up on the subject. On hearing Mr. Anderson say that the majority of Western farmers favour a change and a dual marketing regime, I have to wonder if perhaps he is generalizing. Every one claims to have done surveys or studies showing that farmers want a change and a dual marketing regime, whereas board members who are also producers oppose the move. I have the feeling that each group is defending its position and its own interests, while pursuing the same goal, namely looking out for the farmers.
Mr. Heinbecker and Mr. Vandervalk, what do you think of the stand taken by the board and by a substantial number of producers, many of whom contacted me at my Ottawa office? They want producers to have an opportunity to discuss the issues and would like a referendum to be held on whether or not the board should be opened up and a dual marketing regime instituted. What is your association's position on the subject?
10:45 a.m.
Vice-President, Western Canadian Wheat Growers Association
I guess when it comes down to western Canadian farmers with agriculture, it's wheat and barley. It's the only commodity, or any type of business in the country, or in fact most of the world, where you don't have the choice. You own your own land, you own the inputs, you own everything, and yet when you make a final product you don't have the right to sell where you want. You don't have that freedom.
I suppose our position, and mine personally, is that you shouldn't have a vote to say whether you have the right to do something.