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

8:05 p.m.

Liberal

Frank Valeriote Guelph, ON

Thank you, Mr. Chair.

Thank you, gentlemen, for coming in, and those appearing by telecast.

I have to echo the sentiments of Mr. Martin. Frankly, I agree with them. I may not do it as dramatically, but I do it with the same conviction and the same passion. Please understand that. I'm concerned about western Canadian grain farmers. They were denied a plebiscite. They had their own. It was ignored. We've had three days of debate and now three days of discussion that will affect something as iconic as the Wheat Board and obviously will dramatically affect small farms in the provinces.

However, at the risk of being objected to here, I will try to draw out my questions to the technical nature of the bill. Mr. Knubley, I'm hoping you can talk to me about the legislation and not just the report of the working group. Specifically, can you speak about the commercialization or the privatization, if you will, of the Wheat Board after the transition period?

Clause 42 talks about the corporation submitting an application under either the Canadian Business Corporations Act or the Canada Cooperatives Act or the Canada Not-for-profit Corporations Act. It then goes on to say that before they do, they have to send their application to the minister.

That offends me. I think it would offend any entrepreneur out there. Other farmers right now have a right to create a co-operative without getting permission from the minister. This is a minister who claims freedom for farmers, and yet is micromanaging every single aspect and move of the interim board and even the board that chooses to privatize.

Would you please explain to me why, Mr. Knubley, a board that is going to go private and register under any of those three pieces of legislation needs to seek the permission of the minister?

8:05 p.m.

Deputy Minister, Department of Agriculture and Agri-Food

John Knubley

Thank you, Mr. Chair.

On this issue I'm going to turn to Greg Meredith, the assistant deputy minister for strategic policy.

8:05 p.m.

Greg Meredith Assistant Deputy Minister, Strategic Policy Branch, Department of Agriculture and Agri-Food

Thank you very much for the question.

This clause of the bill does a few things. It asks the board to come to the government with a privatization plan and it asks for approval for a couple of reasons. One, to make sure that it's done within a reasonable amount of time--that is, four years, with implementation in the fifth.

The other thing it does is it provides the minister the opportunity to make sure that the taxpayers' money, which is at stake in this operation of the voluntary Wheat Board, is protected.

8:05 p.m.

Liberal

Frank Valeriote Guelph, ON

I'm sorry, but the reading of the legislation does not prescribe that. The intent isn't disclosed through the words that are used. It simply says you have to have the application approved by the minister. This is a board. This is an interim Wheat Board, which is supposed to be for farmers and by farmers, and yet even to the last minute he thinks that he—or she, whoever it might be at the time—needs to somehow have some control over an application. I need to voice my dissent with that.

My next question is to you, Mr. Phillips, with respect to the check-off you just spoke of. I've talked to a lot of farmers. A lot of farmers are concerned, of course, as you know—we all know that. There are some who want the board and some who don't. So let's not kid ourselves. Those who are concerned—apparently a majority—are worried that they're not going to get paid for their grain at the prices they have been receiving.

An example is the fact that the Alliance Grain Traders are opening up a pasta factory, and will probably be doing that because they expect to pay less for grain rather than more. Assuming that is the case, why on earth do you think farmers are going to check off any amount of money for research? They're currently checking off 50¢ a tonne for barley and 30¢ for wheat. I'm hearing from the farmers out there that they have no plans to check off for a long time, until they know that this is going to succeed. There's no guarantee of success, and we've now lost a vital source of income for valued research.

8:10 p.m.

Executive Director, Grain Growers of Canada

Richard Phillips

Thank you.

I would say, when we look at all the other crops out in the open market, that they have check-offs operating very successfully. There's an oat check-off. I will make the estimate that over 90% of the money stays in these check-offs, and that less than 10% of the money for each of these commodities would ever be withdrawn by farmers. So oats, there's a big check-off; canola, there's a check-off; peas, there's a check-off; and lentils, there's a check-off. There are check-offs for all those other crops, and farmers leave the money in there because they know there's value to the research. And almost regardless of whether they see the price—

8:10 p.m.

Liberal

Frank Valeriote Guelph, ON

Mr. Phillips, I'm talking about future check-offs, not current check-offs. It's doubtful that these check-offs will be made by farmers when they're not secure with the form of income.

8:10 p.m.

Executive Director, Grain Growers of Canada

Richard Phillips

Right now farmers can request their check-off back if they're not happy with what's going on with the work. It's up to the Western Grains Research Foundation to make a case, and for farm groups to stand up and point out the value of this research and the objectives. If $1 million goes in, it's $5 million of value coming back out to farmers, because, at the end of the day, I think a lot of farmers will look ahead. They may be unhappy with some stuff, but when they look ahead, I think most people will leave money in there, because without the research they're going to get left behind in the world market.

8:10 p.m.

Conservative

The Chair Blaine Calkins

Thank you very much, Mr. Valeriote; your time has expired.

Mr. Merrifield.

November 1st, 2011 / 8:10 p.m.

Conservative

Rob Merrifield Yellowhead, AB

Thank you very much for coming in as a working group and being able to lend your expertise to this.

I take note that you talk about the importance of the rail freight service review in your report. I actually had a fair amount to do with railway and the rail freight service review. In fact, it was a two-year study on the rail freight service, which was extended because we saw the performance of rail considerably increase as we neared the end of that. In fact, I think it moved rail performance on-time delivery of cars from about 50% up to over 90% last year. So we're seeing a tremendous increase in service, which is really paramount to farmers. If farmers can't move their product to shore and off to market, they're never going to get a nickel for it. So it really becomes critical for that to take place.

My question concerns the timing of the service review and the marketing with regard to this piece of legislation. You make some reference to it being important that they happen in concert. I don't know who would like to take this question, but can you explain, from your perspective, what you saw as you analyzed this?

8:10 p.m.

Deputy Minister, Department of Agriculture and Agri-Food

John Knubley

As a way of introduction, this is an issue that the working group spent a good deal of time discussing. We held a special session on logistics. As I mentioned earlier, we had officials from Transport Canada who were involved in the rail review participating in our discussions. I will let Gordon Bacon discuss the issues, but the simple message from the working group is that we very much see the rail review as complementary to Bill C-18 and the work that's being done as a priority to move forward in that regard.

Gordon.

8:10 p.m.

Gordon Bacon Chief Executive Officer, Pulse Canada

As the deputy minister noted in his opening remarks, predictability was the key message that came through from all the witnesses that the working group spoke to, and predictability in rail service was certainly a key part of this. What we were wanting to do in terms of managing a transition or making recommendations for a transition was to ensure that we had addressed all areas of predictability. As people know, the Wheat Board has played a major role in bringing grain into the primary system, its movement to port position, and its handling at port.

The committee's strong recommendation was that the rail freight service review recommendations and the course of action the government set out on March 18 needed to move forward quickly. There was discussion that they certainly needed to move in tandem, because this was going to enhance the level of predictability in a major cost to all farmers that is incurred in the movement of product from farm to port and ultimately through to destination.

I'm very pleased. The committee actually hasn't met, but the government made the announcement yesterday that a facilitator has been appointed and that this process is now going to begin.

8:10 p.m.

Conservative

Rob Merrifield Yellowhead, AB

Yes. Actually it began a long time ago, about a year ago or even prior to that, and the shippers didn't need to wait for legislation to move to a service agreement. In fact, many of the large grain corporations have done this and are working toward one and have moved that ball down the court a long way.

Can you tell me where the Wheat Board is on it? To your knowledge, have they made a service agreement with the railways? It would be paramount for them to move, since they are one of the largest movers of product.

8:15 p.m.

Deputy Minister, Department of Agriculture and Agri-Food

John Knubley

I understand from discussions with Ian White that they intend to undertake those discussions for setting commercial agreements. In terms of the rail service review, there is still work to do. As you know, the six-month facilitation process, which now has a facilitator, will lead to negotiating the template for those service agreements as well as—

8:15 p.m.

Conservative

Rob Merrifield Yellowhead, AB

Yes, but the facilitator is there just to make certain, if an agreement bogs down. But that certainly doesn't retard the ability of shippers to work out a service agreement. In fact, some of the larger grain handlers have accomplished this. But it' s of keen interest to me to see why our largest shipper, which is the Wheat Board, doesn't have an agreement. The idea of just starting to think about coming up with an agreement seems a little bit behind the ball.

8:15 p.m.

Deputy Minister, Department of Agriculture and Agri-Food

John Knubley

I think that upon assent to this bill they will move forward quickly on their commercial agreements, and they will have their opportunity to do forward contracts. It's at that point that these commercial agreements can be really moved forward.