Evidence of meeting #2 for Bill C-18 (41st Parliament, 1st Session) in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was farmers.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

John Knubley  Deputy Minister, Department of Agriculture and Agri-Food
Murdoch MacKay  Commissioner, Canadian Grain Commission
Richard Phillips  Executive Director, Grain Growers of Canada
Greg Meredith  Assistant Deputy Minister, Strategic Policy Branch, Department of Agriculture and Agri-Food
Gordon Bacon  Chief Executive Officer, Pulse Canada
Stephen Vandervalk  President, Grain Growers of Canada
Bob Friesen  Farmers of North America Inc.

7:50 p.m.

Conservative

The Chair Conservative Blaine Calkins

I'm going to stick by my previous decision.

Mr. Knubley, if you feel comfortable answering the question, by all means do so. If other members wish to, they can proceed.

7:50 p.m.

Deputy Minister, Department of Agriculture and Agri-Food

John Knubley

I think there are two or three things I can say on this topic, and I'd be happy to make those remarks.

First of all, the issue of cost-benefit analysis was not a subject of discussion for the working group. In keeping with the mandate of the committee, it was to assume that we were moving forward to implement an open-market approach by August 1, 2012. The focus of the work of the working group has been very much on the “how”, not the “whether”. In fact....

I understand your question, and I will come to it.

7:55 p.m.

NDP

Pat Martin NDP Winnipeg Centre, MB

Sir, my question to you as the deputy minister is were you asked by the minister to develop an analysis of the impact of this legislation to present to Treasury Board? Yes or no.

7:55 p.m.

Deputy Minister, Department of Agriculture and Agri-Food

John Knubley

Let me elaborate a little.

7:55 p.m.

Conservative

The Chair Conservative Blaine Calkins

Mr. Storseth, do you have a point of order?

7:55 p.m.

Conservative

Brian Storseth Conservative Westlock—St. Paul, AB

Making some rules is not a reason or a right to break the rules. He keeps referring questions specifically to the deputy minister--what he did on behalf of the government and what he gave to the minister. He's here as a member of the working group. This is about technical questions.

If you don't have the expertise to ask technical questions, you should pass it on to somebody who does.

7:55 p.m.

Conservative

The Chair Conservative Blaine Calkins

Thank you, Mr. Storseth.

Mr. Knubley, it's been raised here that the question is out of order. That's the argument made by Mr. Storseth. Mr. Martin disagrees with that. I'm trying to find a common ground where we can proceed and ask the witnesses questions that are germane to the topic.

Mr. Knubley, if you feel there is something germane to the topic that you can share with us, I would encourage you to do so. Otherwise, I will move on through the questioning list.

7:55 p.m.

Deputy Minister, Department of Agriculture and Agri-Food

John Knubley

On the issue of cost-benefit analysis, this was not part of the work of the people here tonight. I brought a binder with seven or eight studies that have been done over the last 15 years on the topic of cost-benefit analysis. This has been a long-standing debate, and there have been many studies done, in support of an open-market approach and against it.

The list of studies that I've brought today includes one by Professors Carter and Loyns in 1996 entitled “The Economics of Single Desk Selling of Western Canadian Grain”. There are also two studies by the George Morris Centre in 2002. Many of you may have noticed that yesterday the George Morris Centre released another report supporting the open market approach. There are two C.D. Howe studies done in 2008 and 2011 that are also supportive of an open market approach. In 2008 Informa Economics did a study called “An Open Market for CWB Grain”.

Overall, these studies find no evidence that prices are higher because of the Wheat Board monopoly powers. They point to evidence that prices to farmers in other countries are higher for the same quality and market, and they identify higher costs associated with the CWB monopoly itself.

7:55 p.m.

NDP

Pat Martin NDP Winnipeg Centre, MB

I don't mean to be rude, Mr. Knubley, but the time is limited.

Have you done an analysis of the closing costs for wrapping up a $6-billion-a-year corporation? KPMG did an independent study. They estimated that it would cost as much as $500 million to wrap up and conclude the activities of the CWB as we know it. Do you concur with those figures? Have you done your own analysis? Have you advised the minister and the government of what the closing costs would be?

7:55 p.m.

Deputy Minister, Department of Agriculture and Agri-Food

John Knubley

We have examined those costs and have discussed them with some of the Wheat Board officials. Where we believe we will make progress in terms of identifying these costs and these transition costs--

7:55 p.m.

NDP

Pat Martin NDP Winnipeg Centre, MB

Do you know what they are now?

7:55 p.m.

Deputy Minister, Department of Agriculture and Agri-Food

John Knubley

Once the bill is passed, we will be able to sit down under the new governance of the Wheat Board--

7:55 p.m.

NDP

Pat Martin NDP Winnipeg Centre, MB

Some of us say that we shouldn't pass the bill until we know what those costs are going to be.

Is it going to cost $500 million to dismantle the Canadian Wheat Board? That's above and beyond losing 450 jobs in my riding and all the auxiliary jobs associated with the activities of the Wheat Board.

Yes or no, are those figures accurate?

7:55 p.m.

Deputy Minister, Department of Agriculture and Agri-Food

John Knubley

Mr. Chair, those are the costs identified by Mr. Oberg, the chair of the Wheat Board, in terms of moving forward, with reference to the KPMG study.

7:55 p.m.

NDP

Pat Martin NDP Winnipeg Centre, MB

But do you concur?

7:55 p.m.

Conservative

The Chair Conservative Blaine Calkins

Mr. Martin, I'm sorry, your five minutes has expired.

We'll have questioning from the Conservatives, and Mr. Dreeshen, for five minutes, please.

7:55 p.m.

Conservative

Earl Dreeshen Conservative Red Deer, AB

Thank you very much, Mr. Chair, and welcome to the working group members, both here and abroad.

As a grain farmer from western Canada, I must say that I'm looking forward to your analysis as we go through how marketing freedom for wheat and barley growers is finally going to be achieved.

One of the issues that has been brought up is that of grain quality. We've heard of new businesses that are ramping up investment plans to take advantage of a revival in production, with an emphasis on quality, especially in the malting barley industry. We've had announcements. Last week we had one on a new pasta plant being built in Saskatchewan, and today there was one on the expansion of malting facilities in central Alberta, where I'm from.

When I think of the other value-added industries that have just been waiting to get hold of top-quality grain to get to market, I'm puzzled by comments from the chairman of the Canadian Wheat Board that there would be a shift in focus to quantity from quality.

My first question is based on the comments of the chair. It begs the question: Who will be responsible for the maintenance of grain quality in western Canada after this bill is passed?

8 p.m.

Deputy Minister, Department of Agriculture and Agri-Food

John Knubley

Mr. Chair, on this issue I think the working group saw very much that quality was an issue for all aspects of the supply chain. Farmers themselves are committed to quality. Grain companies are committed to quality. Above all, of course, in terms of the supply chain, the role of the Canadian Grain Commission is fundamental, so I would like to ask Murdoch MacKay to speak to these issues.

8 p.m.

Murdoch MacKay Commissioner, Canadian Grain Commission

Good evening.

The mandate of the Canadian Grain Commission is defined for us under the Canada Grain Act. It states that we, the Canadian Grain Commission, are to establish and maintain standards of quality. We are to regulate grain handling in Canada and ensure that the grain is a dependable and safe commodity.

We basically certify the quality, grain safety, and weight of grain. We are the group that sets the grade and the standards for grain in Canada for 21 grades under the Canada Grain Act. When we set those grades and standards for grain quality, they're based on scientific research that is done in a grain research lab at the Canadian Grain Commission. In our grades and standards, we describe the quality of the grain. It's based on end-use quality. It's supported by scientific research, and we review those grades regularly.

In fact, today in Winnipeg the Western Standards Committee was meeting to discuss the quality of the standard for this year, and tomorrow the Eastern Standards Committee will be meeting also. The result of all of this is that our customers get consistent quality each and every year. They know what they're going to get.

What we do at the end of the day is the most important thing of all. After a sale is made, be it by the Canadian Wheat Board or by another exporter, we grade that grain as it's loaded onto the vessel. We grade every 2,000 tonnes, and those 2,000-tonne increments must meet the standard and quality of the grade that has been sold.

At the end of the shipment, we provide a certificate final, and that certificate final says the grade of grain that has been loaded onto the boat and the weight of that grain that has been loaded onto the boat. We provide that to the exporter, who then provides it to the end-use customer. That certificate final is what our end-use customer is looking for.

When it comes to quality, the Canadian Grain Commission has been doing this for 100 years, and we will continue to do that.

8 p.m.

Conservative

Earl Dreeshen Conservative Red Deer, AB

Thank you.

I know that on our farm we use the load-lock system to make sure we know what we've sent in to get graded, and we have that type of security as well. It's important.

Our government has also invested significantly in research. We believe that research is key to keeping the grain sector strong and competitive. Under the monopoly that the Canadian Wheat Board had, there was a voluntary check-off for wheat and barley research that was collected from the producers. It supported the Canadian International Grains Institute, the Western Grains Research Foundation, as well as the Canadian Malting Barley Technical Centre. Under the Marketing Freedom for Grain Farmers Act, it's also going to include a voluntary check-off, which is important.

Would someone explain to the committee how the producers and the entire grain industry benefit from the important research that's done by these groups?

8 p.m.

Conservative

The Chair Conservative Blaine Calkins

Very briefly.

8 p.m.

Deputy Minister, Department of Agriculture and Agri-Food

John Knubley

Thank you, Mr. Chair.

What is in the bill is a recommendation of the report. I would like to ask Richard Phillips or Steve Vandervalk to speak to the issue, as they were participants in the subcommittee on research.

8 p.m.

Conservative

The Chair Conservative Blaine Calkins

Very briefly, please.

8 p.m.

Richard Phillips Executive Director, Grain Growers of Canada

I would say that the importance of research is one of the most consistent messages that we heard on the committee from I think every single producer group we met with, and the value-added process following research.

I think it's critical that the funding continue for the Western Grains Research Foundation, CIGI, and for the Canadian Malting Barley Technical Centre. As well, let me put in a small plug here. There's also funding that needs to go to Agriculture Canada for public research in general.

The private sector does a lot too. But producer group after producer group identified that the WGRF, CIGI, and the Canadian Malting Barley Technical Centre were critical to continue.

8:05 p.m.

Conservative

The Chair Conservative Blaine Calkins

Thank you very much, Mr. Dreeshen. Your time is up.

Mr. Valeriote, five minutes, please.