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

7:35 p.m.

Conservative

The Chair Blaine Calkins

Good evening, ladies and gentlemen. I would like to call to order the second meeting of the legislative committee on Bill C-18.

As arose from our business meeting of yesterday, we have witnesses here to appear in the first two hours of this committee. Present with us today is John Knubley, the deputy minister from the Department of Agriculture and Agri-Food, and Greg Meredith, the assistant deputy minister. From the Canadian Grain Commission, we have Murdoch MacKay. From Pulse Canada, we have Gordon Bacon.

Are we going to have that video conference, or is that not starting until later on?

We'll try to get those feeds going. Joining us will be Richard Phillips and Steve Vandervalk from the Grain Growers of Canada.

As has been discussed, this is the working group. All of these individuals are appearing under that collective banner as the working group, and we will only hear one ten-minute presentation before we proceed to the rounds of questioning, as laid out in our routine motions.

Mr. Knubley, I believe you will be giving us the ten-minute presentation on behalf of the working group. The floor is yours, sir. Welcome.

November 1st, 2011 / 7:35 p.m.

John Knubley Deputy Minister, Department of Agriculture and Agri-Food

Thank you very much, Mr. Chair.

I would also like to thank the members of the committee.

I'm pleased to be here today to speak to the Marketing Freedom for Grain Farmers Act and the contribution of the working group on marketing freedom.

As the chair has indicated, we have members of the working group here today. I served as the chair, and the other members are here representing the working group. Greg Meredith served as head of the secretariat.

If you will allow me, Mr. Chair, I will just make some brief opening remarks about the work, mandate, principles, and findings of the working group. I understand we've distributed as background to members the working group report itself, these remarks, as well as some charts that are used to explain how Bill C-18 works.

Throughout the summer I had the honour to chair this industry working group, which focused on how the system might transition from the current administered system to an open market that includes voluntary marketing pools. The working group had 11 meetings in the space of an intensive period of two months, including subcommittee meetings on specific issues such as a check-off program for research, producer cars and shortlines, and the information needs of farmers.

Over 50 stakeholders made a contribution, and 21 submissions were received. Beyond the working group there have been many bilateral meetings involving the Honourable Gerry Ritz, other officials, and me. For example, I met with ICE Futures Canada on futures contracts, and I have also met with the Winnipeg Chamber of Commerce and the Business Council of Manitoba on the economic impacts of these changes. The minister is always meeting farmers and stakeholders, while the department has recently completed rounds of consultations with farmers and stakeholders on its Growing Forward policy framework.

In terms of the mandate of the working group, it was announced in mid-July, and we were tasked with preparing a report for Minister Ritz by mid-September. The working group--and I believe you have a list of all the members--consisted of private sector participants and a government secretariat including officials from my department as well as Transport Canada. The working group was asked to assume that all grains would be removed from a monopoly by August 2012; that the board would propose a business plan to continue with CWB, the Wheat Board, as a voluntary marketing entity; and that the system would adjust to marketing choice.

The mandate was to address the following: access to elevators, rail, and ports; access to producer cars; organization and funding of market development and research activities for wheat and barley; delivery of the advance payment program; and any other business-related transition issues that concern the grain-handling and transportation system.

As chair of the working group, I would like to emphasize the word “system” in this last point. Our work was very much focused on this concept and on how to make the supply chains work better. Other issues, as you can see in the report itself, include price discovery, farmer information requirements, and issues related to a voluntary wheat board.

As its discussions took place, the working group developed principles to provide a framework for assessing the transition to a new voluntary marketing system. I refer you to those in the working group report at the beginning in the opening section. I won't go through the details of all six, but let me give you a few highlights.

The first principle identified by the working group was all about predictability and certainty. We heard again and again from farmers and stakeholders who met with us that they had a desire for a smooth transition with a clear understanding of how implementation will occur and when. I can't reinforce enough the importance of this principle and the importance of the principle for the working group and its report.

In addition, there are three other principles that articulate the growth opportunities relating to improved efficiencies, more innovation, and value added.

Finally, two principles focus on the need for an integrated supply chain in which commercial arrangements are based on transparent and timely data and which emphasizes the importance of improving service to domestic and export markets.

In terms of findings, the working group agreed that overall we should give a competitive system a chance to work, one that includes a voluntary pooling wheat board--in other words, a dual marketing system. This, we said, would encourage a more integrated supply chain, boost sales, ensure transparency in the marketing of wheat and barley, and offer producers the option of using pools or spot prices.

We see these as the opportunities, and we also discussed a lot of challenges in preparing our report.

In fashioning our eight recommendations, the working group observed that all non-board grains are grown, marketed, and transported efficiently in competitive, open markets. The same farmers who supplied board grains already thrive producing non-board crops. There is overwhelming evidence that farmers in the grain supply system are more than capable of dealing in open markets.

Members did want government to monitor closely how the system will work for access to ports and inland terminals and access for producer cars and shortline rail.

It will be important to ensure that any competitive behaviour does not affect the workings of the new system, especially for farmers and smaller grain companies, including the new Wheat Board.

Minister Ritz has already taken steps on two of the recommendations by giving the responsibility for the delivery of the advance payments program to the Canadian Canola Growers Association and also by providing information to farmers on the new bill. Certainly there is more work to continue on these information aids, but we have started.

Working group recommendations are consistent with Bill C-18. The bill reflects the open market approach of the working group, including the desire to monitor rather than to regulate. Bill C-18 specifically provides for forward contracting and for a levy for the research organizations--the Canadian International Grains Institute, the Western Grains Research Foundation, and the Canadian Malting Barley Technical Centre--both of which are areas of recommendation in the working group report.

Perhaps most important, Bill C-18 provides certainty and predictability, a recurring theme, as I mentioned earlier, in terms of the working group and what I've heard from every farmer and stakeholder. The bill implements an open market by August 1, 2012, and in that way it gives the CWB--the Wheat Board--sufficient time to prepare a business plan for a new viable entity and with board guarantees in the interim. This of course is over the five-year transition period.

In the dual marketing system, farmers who want to pool can, and farmers who want to use the new tools have that option too.

Let me conclude in the way the working group report does, with optimism that farmers and other players can meet both the opportunities and challenges of the new system.

I look forward to your questions on the working group report and Bill C-18.

Thank you very much.

7:40 p.m.

Conservative

The Chair Blaine Calkins

Thank you very much.

We'll now proceed to our speaking list. For the first round, for the New Democratic Party, Mr. Martin, I would assume.

7:40 p.m.

NDP

Pat Martin Winnipeg Centre, MB

Yes, thank you, Mr. Chairman.

How long are the speaking rounds?

7:45 p.m.

Conservative

The Chair Blaine Calkins

I believe, as we agreed upon at the meeting yesterday, it is five minutes.

7:45 p.m.

NDP

Pat Martin Winnipeg Centre, MB

Thank you for your presentation, Mr. Deputy Minister.

My question for you, as members of the working group, is can you tell me if there has been a cost-benefit analysis to prove beyond any reasonable doubt--or at least to indicate there is empirical evidence, demonstrable evidence--that prairie farmers will be better off without the Wheat Board than they are now?

Can you tell me what kind of impact study you were asked to do? What kind of analysis were you asked to present to Treasury Board, which would accompany any piece of legislation to assess the impact of this sweeping comprehensive reform to the western agricultural economy?

I would ask you, Mr. Deputy Minister and Mr. Knubley, can you share with us the research you must have done on behalf of the minister regarding cost-benefit analysis and impact study and essentially the business case for this legislation? It will surely lead to the demise of the Canadian Wheat Board as we know it.

7:45 p.m.

Conservative

The Chair Blaine Calkins

Before I recognize the point of order, can you give me a little bit of latitude here, Mr. Storseth?

This isn't going to cost any of your time, Mr. Martin.

I failed to inform the committee. I believe we have, and I'm trying to confirm right now, Mr. Richard Phillips and Mr. Steve Vandervalk by audio. Is that correct?

7:45 p.m.

A voice

Richard Phillips is here and Steven Vandervalk as well.

7:45 p.m.

Conservative

The Chair Blaine Calkins

Gentlemen, we do not have a video feed for you, so we'll simply accept an audio feed. If you are posed a question, and I'm assuming that you've heard the testimony that has already been given, you will have to identify yourself for the sake of the Hansard recording system, as the recorder here will not be able to visually see who is speaking. Mr. Vandervalk and Mr. Phillips, if you do answer a question, ask a question, or engage in this, I'll simply ask you to identify yourself before you begin speaking.

Now we'll resume the committee business. Mr. Martin asked a question, and Mr. Storseth raised a point of order.

7:45 p.m.

Conservative

Brian Storseth Westlock—St. Paul, AB

Thank you very much, Mr. Chair.

If you refer to page 1068 of O'Brien and Bosc, paragraph 2 says:

Particular attention is paid to the questioning of public servants. The obligation of a witness to answer all questions put by the committee must be balanced against the role that public servants play in providing confidential advice to their ministers. The role of the public servant has traditionally been viewed in relation to the implementation and administration of government policy, rather than the determination of what that policy should be. Consequently, public servants have been excused from commenting on the policy decisions made by the government.

I believe trying to get advice that the public servant may have given to Treasury Board would fall under this and would fall under page 1068, Mr. Chair.

7:45 p.m.

Conservative

The Chair Blaine Calkins

That's great; the very first question that's posed has a challenge to it. The question by Mr. Martin is one of a cost-benefit analysis. Mr. Storseth, you're arguing that according to page 1068 the question is out of order. I suppose I have to have a ruling.

Mr. Martin, would you like to...?

7:45 p.m.

NDP

Pat Martin Winnipeg Centre, MB

On the same point of order, if I'm going to be interrupted on such a basic question, I'd at least appreciate the opportunity to respond to the point of order.

7:45 p.m.

Conservative

The Chair Blaine Calkins

Fair enough.

7:45 p.m.

NDP

Pat Martin Winnipeg Centre, MB

We have been gagged, bound, and hog-tied in this committee to investigate in any meaningful way the most comprehensive and sweeping legislation to hit the agricultural community in a century, in 75 years at least. We've been limited to two sessions of two hours each.

7:45 p.m.

Conservative

The Chair Blaine Calkins

Mr. Martin, you're--