Evidence of meeting #3 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

  • Allen Oberg  Chair, Canadian Wheat Board
  • Ian McCreary  Former Director and Farmer, Canadian Wheat Board
  • Kenneth A. Rosaasen  Professor, University of Saskatchewan
  • Stewart Wells  Director, District 3, Canadian Wheat Board
  • Henry Vos  Former Director, Canadian Wheat Board
  • Ron Bonnett  President, Canadian Federation of Agriculture
  • Jeff Nielsen  Former Director, Canadian Wheat Board
  • John Knubley  Deputy Minister, Department of Agriculture and Agri-Food
  • Greg Meredith  Assistant Deputy Minister, Strategic Policy Branch, Department of Agriculture and Agri-Food

6:40 p.m.

Conservative

The Chair Blaine Calkins

Mr. Hoback, your time has expired.

Moving on to Mr. Valeriote for five minutes, please....

November 2nd, 2011 / 6:40 p.m.

Liberal

Frank Valeriote Guelph, ON

Thank you, Mr. Chair.

Mr. Oberg, I'm going to give you two and a half minutes to respond to Mr. Hoback. But before you do that, think about the questions he asked.

Mr. McCreary, I have two questions for you. You spoke of an almost an umbilical tie between the availability of producer cars and the single desk system. So I want you to speak about that first.

Secondly, Murdoch MacKay from the Canadian Grain Commission was here yesterday, and he made it sound like, don't worry, be happy when it comes to the issue of grain quality. I understand that's also an issue when marketing your grain and that, too, is umbilically tied to the single desk system.

So could you speak more about those two issues, and if you could take about two and a half minutes, I'll time you. Then I want Mr. Oberg to take the rest of the time to respond to Mr. Hoback. Thank you.

6:40 p.m.

Former Director and Farmer, Canadian Wheat Board

Ian McCreary

Thank you.

First, I'll deal with grain quality very quickly and very simply.

The Canadian Grain Commission sets the grades, but ultimately the value that's created for the different grades happens because the single desk can price discriminate. It's that simple, but that's a big part of where the piece goes. When you look at the marketplace, you say we've got grades for No. 1 and No. 2 peas, we've got grades for No. 1 and No. 2 lentils, but we only get paid for No. 2 or better. There's no premium for No. 1 lentils and No. 1 peas. That's because there's no single desk to price discriminate in those crops. There is in wheat. That's where part of the market premium comes from.

In terms of producer cars and a single desk system, there are two really important ties. The key for a producer car shipper is they have to have a liquid market that allows grain to change ownership in port position, because instead of selling it on the basis of the elevator, they sell it on the basis of the port position.

Canada tried to have price discovery in port in canola in the seventies and eighties, and we didn't have the capacity to manage price discovery in port in canola, which was a 2 million tonne crop. There are 20 million tonnes of wheat, so price discovery can't happen. The value goes out of the producer cars and, ultimately, if you don't get value, you don't ship them, because it's a lot easier to just deliver the grain to a local elevator. There's no work involved in that, and that's why there are ultimately no producer cars or very few producers cars. Less than 3% are non-board grains.

6:45 p.m.

Liberal

Frank Valeriote Guelph, ON

Will all of this be compromised when the single desk is gone?

6:45 p.m.

Former Director and Farmer, Canadian Wheat Board

Ian McCreary

Yes, without question, the economics comes off the table. The value is no longer there and, ultimately, the government is creating a train wreck for a lot of short-line railways and a lot of infrastructure in Saskatchewan.

6:45 p.m.

Liberal

Frank Valeriote Guelph, ON

You looked at the legislation and there's no provision to protect those two issues?

6:45 p.m.

Former Director and Farmer, Canadian Wheat Board

Ian McCreary

The difficulty is that in order to protect it, you have to have a transparent mechanism for price discovery in port position and there's nothing in the legislation that provides that, among other pieces. Ultimately, the producer car shipper has a transaction that happens beyond the farm gate and they need a mechanism to establish value, and there's no price discovery in port at this time that's transparent.

6:45 p.m.

Liberal

Frank Valeriote Guelph, ON

Mr. Oberg, I'm going to give you the floor to respond to Mr. Hoback's comments and rant. Go ahead.

6:45 p.m.

Chair, Canadian Wheat Board

Allen Oberg

Okay, thank you, Mr. Valeriote.

One of the issues you mentioned, Mr. Hoback, was durum, and I think by your comments you were suggesting that the Canadian Wheat Board is a deterrent to value-adding here in Canada. I'm here to tell you that certainly isn't true. To give you just a few numbers, western Canada has nearly 40% of Canadian durum capacity; North Dakota, just across the way, has 29% of U.S. durum milling capacity. If you look at the numbers on a per capita basis, they just don't add up. On a per capita basis there's more milling capacity, more malting capacity, here in Canada than there is in the U.S., which has never ever had a wheat board to my knowledge.

6:45 p.m.

Liberal

Frank Valeriote Guelph, ON

Go ahead.

6:45 p.m.

Chair, Canadian Wheat Board

Allen Oberg

Let me finish. Even if that were true—just assume for a minute that it were detrimental to establishing value-adding—the primary reason that maltsters and millers want producers out of the way is so they can access their raw product more cheaply.

Let me quote from the annual report of the Alliance Grain Traders, who just announced or passed a plan in Regina: “Margin erosion is combated by negotiating lower prices from growers....” That's from their own report.

I'll tell you that as a farmer, selling my grain for less to support value-adding doesn't make me very excited.

6:45 p.m.

Conservative

The Chair Blaine Calkins

Mr. Valeriote, you still have 15 seconds.

6:45 p.m.

Liberal

Frank Valeriote Guelph, ON

All right.

Mr. Oberg, you commented about Mr. Ritz's promise that there would be a vote, that he would respect the opinion of farmers. You know a lot of farmers. In fact, you know a lot of farmers who voted Conservative. Can you tell me the number of farmers that voted Conservative who understood they would have an opportunity to vote under section 47.1 of the Wheat Board legislation?

6:45 p.m.

Chair, Canadian Wheat Board

Allen Oberg

I don't have the exact numbers, but my constituents and Minister Ritz's constituents are in the same area. He was elected as a Conservative candidate. I was elected as a single desk director. Obviously, many farmers who voted Conservative also support the Canadian Wheat Board.

6:45 p.m.

Conservative

The Chair Blaine Calkins

Thank you, Mr. Oberg.

Thank you, Mr. Valeriote. Your time has expired.

Now we move to Mr. Anderson for five minutes.