Agriculture Committee on April 7th, 2014

[The Chair, Conservative, Bev Shipley]

I want to welcome everyone today to our 24th meeting of the Standing Committee on Agriculture and Agri-Food.

Today, we're doing clause-by-clause.

Consideration pursuant to Standing Order 75(1), consideration of clause 1, short title, is postponed.

We shall move into the act to amend the Canada Grain Act and the Canada Transportation Act and to provide for other measures.

Colleagues, today with us we do have, from the Department of Agriculture and Agri-Food, Greg Meredith, assistant deputy minister, strategic policy branch; from the Department of Transport, Lenore Duff, director general, surface transportation policy; from the Department of Justice, Sara Guild, counsel, agriculture and food inspection legal services; Demeena Seyan, counsel, agriculture and food inspection legal services; and Alain Langlois, senior legal counsel, transport legal services.

I want to welcome each of you to this meeting. Hopefully, it will run along fairly smoothly so that we aren't here all night. But just so you know, there is a motion on the floor that, if we haven't got through it by 11 o'clock tonight, then we will move through those motions.

With that, to my colleagues, if you would take the bill, we shall start. How does committee want to move through this? Do you want to do it by section or do you want to do it by subsection? I will take direction from the committee on how you want to proceed with it. There have been amendments, as you know, that have come forward. Some of these clauses do not have any amendments. But I'm open to direction from the committee, if you want to do clause-by-clause or take the subsection within the clauses.

I'm going to do clause-by-clause, then, without the subsections. We will get to those subsections as we hit them.

On clause 2, the Canada Grain Act is amended, adding the following. There's a number of sections to it.

Shall clause 2 carry?

(Clause 2 agreed to)

Shall clause 3 carry?

(Clause 3 agreed to)

[The Chair, Conservative, Bev Shipley]

Hearing no debate, shall clause 4 carry?

(Clause 4 agreed to)

(On clause 5)

We do have proposed amendments for clause 5.

We have LIB-1, reference 6511663, moved by Mr. Eyking.

Mr. Eyking, would you like to speak to your amendment, please.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

Thank you, Chair.

It's already explained in the amendment here. It indicates that in clause 5 on line 39 it's going to be changed to:

including, but not limited to, provisions respecting the rights of grain producers to deliver grain to licensees in a timely manner, the fairness, accuracy and transparency of basis calculations affecting the price paid by licensees to grain producers at Prairie delivery points, and compensation.

My amendment adds some very important details around these key issues.

First, of course, is the ability of farmers to deliver when their contract says that it can. Second is some clarity and transparency around how grain companies calculate that basis deduction of grain prices.

Mr. Chair and colleagues, we've had many witnesses bring up this point. We had Mr. Cherewyk, from Pulse Canada. He is the chief operating officer from Pulse Canada. He brought this forward. We had Brett Halstead from the Canola Growers Association. We also had Matt Sawyer from the Alberta Barley Commission and Ian McCreary. So we had many witnesses who brought this forward, wanting something in here that does more for farmers and gives them what they deserve.

It's pretty self-explanatory, so I move that this amendment be put in that clause.

[The Chair, Conservative, Bev Shipley]

Mr. Payne.

[LaVar Payne, Conservative, Medicine Hat, AB]

Thank you, Chair.

Thank you for putting forward your amendment.

We just got rid of the Wheat Board. I'm not sure that we need any kind of pricing that we would see. We're letting the market do the pricing, and we've also had other witnesses, such as Richard Phillips, who said that in reality you can't regulate everything.

So I have a little bit of difficulty in what you're proposing here.

Thank you.

[The Chair, Conservative, Bev Shipley]

Mark.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

I think, Chair, if anything, we found that this is not about the Wheat Board. This is about nothing having been put in place when the Wheat Board was gone.

When you see the quotes from Ian McCreary, they say that at the end of the day there is nothing that has been put in the legislation since the Wheat Board was taken away that would make sure that farmers get their share and makes sure there is some sort of mechanism that their grain would be delivered on time. That's what this is all about.

Mr. Payne, you've heard all the witnesses here stating that they want more teeth and they want more legislation to make sure they get their fair share and that they get the service that was provided for them. You cannot dispute that this would put some teeth into that one section there to make sure that we're achieving that.

[The Chair, Conservative, Bev Shipley]

Mr. Lemieux.

[Pierre Lemieux, Conservative, Glengarry—Prescott—Russell, ON]

That's great. Thank you, Chair.

I understand that this is dealing with basis calculations. I get that. But I do have some concerns. These clauses of Bill C-30 deal with the Grain Commission ensuring that contracts are honoured. But I don't think it's the role of the government to be involved in fairness and accuracy. Those are very general terms for us to be legislating and their interpretation is wide open here. I don't think it's for the government to look at something and say, “Well, that's fair ” or “That's accurate”.

Mr. Chair, I would say that the clause, as it stands right now, is sufficient, and as I mentioned, it ensures that contracts relating to grain must be honoured.

[The Chair, Conservative, Bev Shipley]

Mark.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

I can quote Ian here. He states it. He says, “We require transparency both for prices and grain flow. We need an improved information process that approves the market information.” He says that we can go some distance by getting better information out there to the public.

The numbers are out there. When you look at the basis price you see what.... I know that when you look at the price the Wheat Board got before and what they're getting now....

We're not sitting here saying that we want the Wheat Board back, but we're saying that you need somebody here who is going to monitor your prices, the transportation. You need some sort of watchdog and regulatory process that's going to guarantee that the farmers get their fair share here. Just stating, “Okay, we're going to move so many cars of grain” is not necessarily going to put more money into farmers' pocket if they don't get their contracts delivered on time and they don't receive the price that they're due.

[The Chair, Conservative, Bev Shipley]

Mr. Dreeshen.

[Earl Dreeshen, Conservative, Red Deer, AB]

Thank you, Mr. Chair.

I also think that in a lot of the discussions people were recognizing the contractual aspect of the basis. You're looking at elevation, you're looking at cleaning, and you're looking at inspections, at all of these other types of things that each individual grain company keeps unto themselves.

You can ask, and you can find out what it is going to be, but I think that when you take a look at the main issue as far as what the witnesses are saying, it's that people were saying, “This basis is wide because we cannot take your grain.” I think that somewhere in this conversation we have got to the stage where people are saying, “Look at how much has been lost because of this.” On those contracts that were brought in for November and should have been paid out here in March, there's been nothing lost. I think that somewhere people have this concept that this is what is taking place, other than the extra storage they have, as well as the interest that they would have there.

I think we're trying to put too many different aspects of this into this one component of the amendment. I believe we should be letting the market forces find their way through this.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

If you just let the market forces deal with it, then the farmer who says, for instance.... I visited farmers right across the Prairies last fall. They had grains that they had sold at a certain price. How can you say it's all right that they kept that grain from November all the way to the following April? I'm a farmer—I grew vegetables—and if I had to keep my crop right to April, with the storage of keeping it, and losing the price that you were going to get in November and having to wait...who's paying for it? That's where you get the $8-billion loss.

You can blame it all on the railroad, and the railroad is a big part of this, but it's also who's handling it and whether you are meeting your contracts. How can you say to your farmers that if they store this for the whole fall or winter they're not losing any money? I can't see where you get the logic in that.

[Earl Dreeshen, Conservative, Red Deer, AB]

In response, Mr. Chair, that's exactly opposite to what I have said. When you have these prices that you have contracted in November, that is the price you are going to receive. The basis, the spread of the basis, came about because of them saying, “Hey, we can't move this now, so don't bring in any other grain that we have to deal with.”

You know what your price is. If you say that you're going to get $10 for canola in November, once you deliver it that's what you're going to get. You're not going to have a loss in that particular timeframe.

Unfortunately, as I indicated, we are putting these two things together and we're making this assumption that it's like when the stock market goes down, that you only made that loss when you sold at the bottom. The reason why it is where it is was that they were saying they could not take it. That's why the spread was there. You have to look at all aspects of it in order to make a wise decision to work our way through it.

[The Chair, Conservative, Bev Shipley]

I'm going to hear one more comment. We're starting to go back over some of the same things.

We'll hear from Mr. Eyking, and then if there's one more rebuttal.... Then we'll call the vote.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

Well, when you look at all the witnesses we brought forward here, I think that in all due respect to all these witnesses who came in.... I just listed them off, and the clerk.... It's all quoted there. They state that there has to be something better here to help these farmers get what's due to them. You can't just say that the free market system is going to do it and there should be nothing watching out for them, because if you let that happen, they're just going to get less and less.

I guess the Conservatives must be saying that they are not agreeing with any of these submissions brought forward by all these witnesses, whether it's the canola growers or.... They all came forward here, like Pulse Canada. They want to see something better that makes sure their farmers get their due here, and I think here is where it fits in very nicely, right here, in that context. But if you're not going to have anything, and if this bill that we're putting forward is all about the railway only, then I think you're losing the purpose of it.

[The Chair, Conservative, Bev Shipley]

Mr. Lemieux.

[Pierre Lemieux, Conservative, Glengarry—Prescott—Russell, ON]

Thanks.

I'll just conclude with the comment that it's not the role of government to insert itself in a contractual sense between a buyer and a seller. Those two negotiate their terms. They decide if they're going to enter into a contract or not. It is not for the government to be in there trying to determine if what they are actually negotiating is accurate or fair. If one or the other side feels that it's not accurate or fair, then they don't enter into the contract. However, this provision allows, if there's a contract breach, for it to be arbitrated. That's what the witnesses were asking for.

This clause, as it stands right now in the legislation, allows the commission to arbitrate. There is a strategy here for when contracts break down. They can be arbitrated by the commission. The way it's worded now is fine, but what you're proposing is very problematic.

[The Chair, Conservative, Bev Shipley]

Mr. Eyking.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

As we've heard in the last comments, Mr. Chair, I think when we look at it, we're looking at transparency of what the farmer gets. There isn't enough in this that's going to guarantee.... I know the parliamentary secretary well. There's some process that can follow, whether it's going to be somebody looking at whether the farmer was done wrong or done right. I think if you have enough teeth going forward, and all the players at the table know there's transparency here, there's less chance that the farmer's going to get screwed. I don't see that right now. I don't think there's enough teeth here.

I think we have to respect all those witnesses who came here last week. There's no way the parliamentary secretary can state that these witnesses didn't state that they wanted something in there for more transparency.

[The Chair, Conservative, Bev Shipley]

I think we're at the end of the debate.

Shall the LIB-1 amendment carry?

[Mark Eyking, Liberal, Sydney—Victoria, NS]

Can we have recorded vote on these amendments?

[The Chair, Conservative, Bev Shipley]

Sure. If you want it recorded you just have to ask for it.

(Amendment negatived: nays 5; yeas 4)

We'll move on to NDP-1, reference number 6501550, moved by Madame Brosseau.

Open up the discussion, please.

[Ruth Ellen Brosseau, NDP, Berthier—Maskinongé, QC]

Thank you, Mr. Chair.

This is along the same lines. It just goes into

(s.4) establishing a system of mandatory reporting, to the Commission, on the price at specified points throughout the movement of grain, including the delivery of grain to elevators, the discharge of grain from elevators, the handling and treating of grain in elevators, and the shipping of grain to or from elevators, as well as the price at port of export;

So what this basically does is it establishes a requirement for mandatory price reporting, including the price at port and export. We think it's important based on some of what the witnesses said here at committee last week. It does target specific areas along the supply chain, and we think it's important to have this in. We can't forget that a lot of the witnesses said that this bill is a good step forward and that we are all here to make it better. So that's why we have submitted this amendment to the bill.