Debates of Dec. 5th, 1994

Canada Grain Act

[The Deputy Speaker]

In my opinion, the yeas have it.

And more than five members having risen:

[The Deputy Speaker]

Pursuant to Standing Order 76.1(8) the recorded division on the motion stands deferred.

[Vic Althouse, NDP, Mackenzie, SK]

moved:

Motion No. 2

That Bill C-51, in Clause 12, be amended by replacing lines 37 and 38, on page 6, with the following:

"et or receipt relates within one hundred and eighty days after the day on which".

Motion No. 4

That Bill C-51, in Clause 19, be amended by replacing line 9, on page 11, with the following:

"grain in a licensed primary elevator, licensed terminal elevator or li".

Motion No. 5

That Bill C-51, in Clause 22, be amended by replacing lines 33 to 40, on page 11, with the following:

"81. (1) With respect to the purchase of western grain from the producer of that grain, every licensed grain dealer shall, at the prescribed time and in the prescribed manner,

(a) issue a grain receipt, elevator receipt or cash purchase ticket stating the grade name, grade and dockage of the grain, and immediately provide it to the producer, or

(b) where no Canada grade name is applicable to the grain, issue a grain receipt, elevator receipt or cash purchase ticket stating the type of grain by name, value of the grain and dockage of the grain, and immediately provide it to the producer."

Mr. Speaker, these motions propose to achieve two things. One is to extend the time that grain may be left in an elevator before it is priced. In effect it will be extending the time from 90 to 180 days and provides additional protection to the farmer who left the grain for storage up to the 180 days.

This is a reduction from the current law in which the protection lasts for one year. It would cut the time in half. The effect on farmers is that it forces them to price grain more quickly than is currently required. Ninety days in my estimation and in the estimation of a lot of producers is not a great deal of time. It forces them to unload the grain that has been delivered to commercial storage to await a price.

Second, Motions Nos. 4 and 5 have the effect of including the designation, "elevator receipt" in the choices of paperwork that might be engaged in on delivery of grain to the various receivers.

It is extremely important that an official elevator receipt be available on demand for the producer. I remind the House that the elevator receipt means a document in the prescribed form issued in respect of grain delivered to an elevator acknowledging receipt of the grain and subject to any conditions contained therein or in this act, entitling the holder of the document, who now be the farmer; (a) to delivery of grain of the same kind, grade and quantity as the grain referred to in the document or; (b) in the case of a document issued for specially binned grain, which is another designation under the act, to deliver the identical grain.

With the inclusion of an elevator receipt we are permitting the producer to retain the exact amount and type of grain he has delivered. He has not yet given up ownership of it. He has only put it in storage and started it into the system.

This is important in the event a grain dealer goes into bankruptcy. It permits the farmer to extract his grain from the institution and safeguards against what can only be described as rip-offs that have occurred in the past.

Prior to the grains act being changed a couple of years ago, some processors actually accumulated thousands of bushels of grain and collected credit on them, when bankrupt, using the grains to relieve some of the elements of their debt. In effect

they were transferring the ownership of that grain from the farmer to themselves without any money having changed hands.

These amendments are designed to provide adequate protection for producers who use the wide variety of choices under the grains act. Therefore no matter what their choice they would have the same recourse to protection by the demand for the issuance of an elevator receipt. With my amendments this would give the producer the protection and knowledge that he would still be the owner and would still have the right to the sale of that grain.

[Leon Benoit, Reform, Vegreville, AB]

Mr. Speaker, I would like to speak on the three amendments put forth by the hon. member for Mackenzie.

The purpose of Motion No. 2 is to limit the time period for a grain dealer to meet the paper requirements to 180 days from the flexible type of arrangement under the Canada Grain Act right now. I do believe flexibility is needed.

The Canadian Grain Commission has to be given the power to set different lengths of time for the different transportation situations and for the different types of dealers in the industry. It takes and requires that flexibility. The 180 days would end up setting a maximum which is too long for some grains and may be too short in the rare case. Flexibility is needed.

We cannot support this motion because that flexibility is needed for the commission to operate properly.

The intent of the motion is good. However we must consider the Canadian Grain Commission's overzealous enforcement in some cases and its unwise laxness in others as in the case of ensuring that companies are operating within the bonding level. While those concerns are there with some of the past dealings of the Canadian Grain Commission I believe it does need the flexibility in this case. Therefore we will oppose this motion.

Motion No. 4 adds primary elevators to the list of terminal and transfer elevators in terms of facilities where the seller will have top priority. If the company that is operating should become bankrupt or insolvent the seller has the top priority, the first right to receive payment for grain that he has in storage in those facilities. This is a good amendment.

It never did make sense to me that a farmer with grain in an elevator of a company that went bankrupt and was out of business would not have the first right to receive payment for his grain that was sitting in that facility. That is the case right now. Therefore we do support the amendment.

Motion No. 5 adds the additional stipulation that in cases where no official Canada grade name is applicable to a grain under the Canada Grain Act, then the grain dealer shall immediately issue a receipt stating the name, the value and the dockage of the grain.

While its intentions are good, this amendment will make it virtually impossible for speciality crop dealers along with others to operate. This is especially so in cases where farmers are loading directly on to a dealer car or a producer car or for truck pick up in the yard and these shipments are going into the United States. In cases like that it would make it virtually impossible for the sellers, the farmers and the dealer to do business.

This recommendation restricts too much. Again the intention is good in that the concerns the member has are legitimate. In some cases now grain is being loaded on trucks without a grade given and without a value assigned.

If that grain does not make it to its destination, what compensation can the farmer get? What proof has the farmer that the grain has been shipped other than the bill of lading, which a farmer should get from a trucker before loading?

In the case of loading directly on a rail car, whether it be a dealer car or a producer car, it is just a copy of the paperwork that the farmer sends to the company and the Canadian Grain Commission. The company they are dealing with has not really been verified by anyone. How much weight would that carry in legal terms? Probably very little.

In practical terms, how is the farmer going to weigh the grain that goes on to the car? How is the farmer going to weigh the grain that is put on a truck and is moving into the United States? There is no practical way.

The cars of course are weighed when they go over the first scale on the track but in terms of grade and dockage, that has to be determined from the spill. In case of a spill, samples can be taken from the product.

My personal experience with this is from people I have talked to who have had spills. One happened a couple of years ago by Innisfree in my constituency. The farmer felt that the compensation was fair. Dockage and grade was taken from the spill. A weight had not been taken but the farmer was paid out at the maximum load that was allowed on the car. Therefore the railways have treated farmers fairly in this regard.

For those reasons I oppose this amendment.

[Vic Althouse, NDP, Mackenzie, SK]

Mr. Speaker, on a point of order, I was listening to the last debate and I wanted to clarify which motions had been grouped. My understanding is that it was Motions Nos. 2, 4 and 5. I believe the hon. member was talking about Motion No. 6. It confuses the debate to have him opposing something we may not yet be talking about.

[The Deputy Speaker]

The member is correct that it is Motions Nos. 2, 4 and 5. It is very difficult for members I am sure to keep track of what motion we are discussing.

[Leon Benoit, Reform, Vegreville, AB]

Mr. Speaker, on a point of order. Motions Nos. 5 and 6 do deal with a very similar topic area, but the member is absolutely correct. I just spoke on Motion No. 6. A lot of the same rationale does apply to Motion No. 5. It is virtually the same rationale except we are not talking about transportation. We are talking about paperwork. The debate I have just given applies if it is translated to paperwork instead of transportation.

[Jean Landry, Bloc, Lotbinière, QC]

Mr. Speaker, it is my pleasure to address Bill C-51, An Act to amend the Canada Grain Act and respecting certain regulations made pursuant to that Act. As you know, the Canadian Grain Commission has the responsibility to guarantee to purchasers of Canadian grain the quality and the quantity that they order, and to ensure the reliability and the wholesomeness of products intended for domestic and foreign markets.

The government wanted to give more operational flexibility to the commission by amending the act. The amendments include changes to the current provisions on licensing and security. The Official Opposition tabled a motion regarding the appointment of the commissioners to the Canadian Grain Commission. Let me tell you that the public has had enough of partisan appointments and is tired of seeing heads roll as soon as a new government takes office.

The amendment to clause 2, which will be discussed more thoroughly later on by a colleague of mine, must be adopted for reasons of transparency. Motions Nos. 2, 4 and 5, tabled by the NDP, deserve some consideration.

The hon. member for Mackenzie proposes that the deadline set in clause 12 be changed. We cannot accept that amendment.

The Canadian Grain Commission requires producers to do what is necessary to get paid for their grain, within 90 days of delivery to an elevator operator or a grain dealer. After this 90-day period, a producer who did not get paid has 30 days to notify the commission. The 90-day period is fixed by regulation.

In its amendment, the NDP proposes to set that period at 180 days in the act. Thus, it would no longer be possible to change that period by regulation. The Canadian Grain Commission would see its flexibility to ensure payment for the grain within a reasonable period of time and especially to avoid bankruptcy be reduced.

Do we need to remind the NDP that this time limit was set up following a Federal Court ruling in 1990, which held the Canadian Grain Commission responsible for the bankruptcy of two of its licensees? The security given by these two licensees was not enough and the taxpayers had to make up the difference, which came to $3.8 million in this case.

Let us just say that it would be better to avoid such incidents from now on. The 90-day time limit provided for in the regulations seems fair. This is why we urge members to vote against this motion.

Motion No. 4 to amend Clause 19 is inappropriate, since we are not talking about the same type of elevator receipts. In the case of terminal elevators or transfer elevators, a receipt can be resold. The last holder has the priority to receive the grain. However, in the case of a primary elevator, the purchase or the sale is handled directly by the producer and the terminal operator.

The elevator receipts are redeemable immediately. Even the Canadian Grain Commission does not see the need to add primary elevators to Clause 19 of this bill, because we are not talking about the same type of transactions.

In Motion No. 5 concerning Clause 22, the NDP proposes that the commonly used name of some types of grain be stated on the grain receipt, or the elevator receipt, if no Canada grade name is applicable to the grain. After checking with the Canadian Grain Commission, it seems that almost every grain has a Canada grade name, even though it is not always well known.

The amendment as proposed by the NDP could cause even more serious administrative problems than if everybody used the grade names. Greater responsibility is imposed on grain producers and operators to state the grade name, grade and dockage of the grain in order to help assess the value of the grain.

Anyway, the Commission can exempt an elevator operation from using the grade. If the Commission releases the lesser known grades of some grains, people should be able to manage. In this case, we do not think the bill needs to be amended in this way.

[Lyle Vanclief, Liberal, Parliamentary Secretary to Minister of Agriculture and Agri-food]

Mr. Speaker, I would like to make a few comments on these three motions.

First I will comment on Motion No. 2. As has already been said this motion which has been put forward by the member for Mackenzie sets out a definite date on which settlement would have to be made. Other members have commented today that there needs to be some flexibility. After a long period of consultation which has taken place on this the industry feels it should be 90 days. That is why it is there. If we were to prescribe in the bill that there be a set number of days, no matter what that was, there would be difficulty in the future. If the industry

deemed it should change, it would take a change in the legislation to do so.

By doing this in 90 days, as will be suggested and done by the commission without having been carved in stone in the legislation, one of the things we have to keep in mind is to keep the money getting to the producers as quickly as it possibly can. If the producers were allowed to leave their grain in an elevator for a longer period of time those elevator operators would probably have to have a greater amount of security posted at all times because of the volume that might be there.

Also, we want to get the dollars back to the producers as quickly as we can. We do not want to put the temptation out there for producers to leave the grain in the elevator a long period of time and start using it as a storage facility to hold their product so they might be able to speculate on the market as it goes along and maybe have some distorting influence on the price of the market.

We certainly cannot support Motion No. 2 for those reasons if no others.

On Motion No. 4, I want to point out to the member for Mackenzie that if he looks at section 112 of the act it already provides protection for the holders of primary elevator receipts. The section that he is referring to or suggesting that they make an amendment to is the section that deals only with terminal and transfer elevators. The provision that the member is requesting is looked after.

The member for Vegreville raised the issue that the producers should have first claim. The producer does have first claim. The producers have first claim in any situation if the producers still maintain their receipt. If the producers wish to assign their receipt to somebody else well that may very well differ the situation. The producers do have first claim as long as they have that receipt.

Motion No. 5 refers to the use of grades on a receipt when it is received. What we want to avoid here is the temptation that has been there in the past to not list the grade name. The elevator operator in the past, when they did not have to list the grade name, it was not necessary that they post security for that product in the elevator.

We want to close that loop and close that possible gap, also recognizing that there may be times when that has to take place and that can take place and that the grade name does not have to be there. The elevator operator in that case, if it were a feed grain or something, could have that without a described grade on it providing that they agree with the commission that they provide security so there would have to be specific recognition and co-operation made in that case.

[The Deputy Speaker]

Is the House ready for the question?

[Some hon. members]

Question.

[The Deputy Speaker]

The question is on Motion No. 2. All those in favour of the motion will please say yea.

[Some hon. members]

Yea.

[The Deputy Speaker]

All those opposed will please say nay.

[Some hon. members]

Nay.

[The Deputy Speaker]

In my opinion the nays have it.

And more than five members having risen:

[The Deputy Speaker]

Pursuant to Standing Order 76.1(8), a recorded division on Motion No. 2 stands deferred.

The next question is on Motion No. 4. All those in favour of the motion will please say yea.

[Some hon. members]

Yea.

[The Deputy Speaker]

All those opposed will please say nay.

[Some hon. members]

Nay.

[The Deputy Speaker]

In my opinion the nays have it. The motion stands deferred.

The next question is on Motion No. 5. All those in favour of the motion will please say yea.

[Some hon. members]

Yea.

[The Deputy Speaker]

All those opposed will please say nay.

[Some hon. members]

Nay.

[The Deputy Speaker]

In my opinion the nays have it.