House of Commons Hansard #33 of the 41st Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was grain.

Topics

Business of the House

3:05 p.m.

York—Simcoe
Ontario

Conservative

Peter Van Loan Leader of the Government in the House of Commons

Mr. Speaker, I welcome the new official opposition House leader. I had a surprisingly positive and constructive relationship with his predecessor. I say “surprisingly” because some people were skeptical that we would work well together, but indeed we did so in a very genuine way. I am very optimistic that the same will continue with the new official opposition House leader. He has proven himself always to be an individual of very fine comportment so I have great optimism about that.

I would like to thank the member for Windsor—Tecumseh for his question, and now in response to his question, I would point out that the government's top priority continues to be creating jobs and economic growth.

In that regard, I am pleased to say that we have had a productive week so far in the House. On Monday, we passed the Keeping Canada's Economy and Jobs Growing Act and sent it to committee.

This very important bill includes vital measures that Canadians need and expect our government to implement, including a tax credit for small businesses that create jobs, extension of the accelerated capital cost allowance for businesses that invest in manufacturing equipment, and much, much more.

Unfortunately, I was surprised that the opposition voted against these positive economic measures. However, we can hope for better in the future.

Then, on Tuesday, we began debate on the Copyright Modernization Act, an important and long-needed bill that will boost Canada's cultural and digital economies.

Unfortunately, members opposite unveiled tactics to delay this bill and the important benefits it would bring to Canada's economy.

In the previous Parliament, that bill had passed second reading after just under seven hours of debate. I hope the opposition will reconsider and allow that to happen this time around.

Nevertheless, tomorrow the House resumes debate on Bill C-11. As I already mentioned, hopefully the opposition will see the wisdom in letting the bill get back to a committee for study and clause-by-clause review.

Yesterday, we began debate on the marketing freedom for grain farmers bill. Again, this is a bill that will have real economic benefits for Canada, especially for the economy of western Canada. It is also a bill which offers members a clear-cut choice, either for marketing freedom or for the continuation of the seven decade monopoly. We are looking forward to a good focused debate on this important platform commitment of ours.

Again, however, we are surprised that we are seeing efforts to prevent this bill from moving forward with a motion to adjourn the debate. We heard some bells yesterday.

We will continue debating the bill this afternoon. The third and final day of debate on the bill, following the motion adopted by the House this morning, will be Monday, October 25.

The next allotted day will be Tuesday, October 26. For the business of the House beyond next Tuesday, I will apprise my counterparts at the earliest opportunity.

Oral Questions
Points of Order

3:10 p.m.

Liberal

Mark Eyking Sydney—Victoria, NS

Mr. Speaker, in response to a question I asked in question period, the minister made note that no defeated Conservative candidates have been hired by ACOA. To that end, could I ask the minister to table a list of persons hired by ACOA and ECBC since the Conservatives came to power?

Oral Questions
Points of Order

3:10 p.m.

Conservative

The Speaker Andrew Scheer

That is not a point of order. There are ways for members to ask the government to provide information such as through questions on the order paper. I do not believe that is a point of order in this fashion.

Oral Questions
Points of Order

3:10 p.m.

Cypress Hills—Grasslands
Saskatchewan

Conservative

David Anderson Parliamentary Secretary to the Minister of Natural Resources and for the Canadian Wheat Board

Mr. Speaker, in reference to the question asked by the member for Guelph, I just wanted to point out he quoted me as saying yesterday, “we want to provide the same freedom for farmers right across the country.” I did in fact say that, but I followed that by saying:

It is the 21st century, people spend, as I have said, hundreds of thousands of dollars on their own operations. They have to pay their expenses. After growing their own crop, harvesting it, buying the bins and the machinery to do that, they should be able to market that product themselves as well.

Perhaps the Liberals' research department is as poor as it seems to be, but if misquoting members and smearing other members is their new strategy, they should perhaps consider a different one.

Oral Questions
Points of Order

3:10 p.m.

Conservative

The Speaker Andrew Scheer

I am afraid question period is over. If members have these types of points to make, the proper place to do it is either through questions and answers or during debate on legislation, but not through points of order.

Decorum in the chamber
Points of Order

3:10 p.m.

Green

Elizabeth May Saanich—Gulf Islands, BC

Mr. Speaker, I am making a point of order I have made before, but it seems particularly poignant today when we are wearing purple and observing Spirit Day on which we are supposed to be assisting lesbian, gay, bisexual and transgendered youth oppose bullying behaviour.

The point of order I wish to make relates to Standing Order 16, that when a member is speaking, no member shall interrupt him or her, and Standing Order 18, that no member shall use offensive words against other members.

I would just ask members to consider what kind of behaviour we are modelling. I know question period is seen to be a blood sport. I know you, Mr. Speaker, would appreciate more decorum.

From the bottom of my heart, as a mother who does not like to see bullying, I would like us to consider our own behaviour.

Decorum in the chamber
Points of Order

3:15 p.m.

Conservative

The Speaker Andrew Scheer

I thank the hon. member for the intervention. We will move on now.

The House resumed consideration of the motion that Bill C-18, An Act to reorganize the Canadian Wheat Board and to make consequential and related amendments to certain Acts, be read the second time and referred to a committee, and of the amendment.

Marketing Freedom for Grain Farmers Act
Government Orders

3:15 p.m.

Conservative

The Speaker Andrew Scheer

The hon. member has six minutes left to conclude his remarks.

Marketing Freedom for Grain Farmers Act
Government Orders

3:15 p.m.

Conservative

Earl Dreeshen Red Deer, AB

Mr. Speaker, before question period we were talking about issues that were going to have to take place during transition. The first was on the Canadian Wheat Board's access. The second was on producer cars.

I had just indicated the third where these changes would not change the Canadian Grain Commission's role in assuring the world-renowned quality of Canada's grain. The Canadian Grain Commission will continue to provide its services regardless of who is marketing the grain.

Fourth, on the issue of the future funding of wheat and barley research and market development, a deduction from producers' sales will be established to continue the same level of funding by farmers to these activities. These funds will support the great work that is being done by the Western Grains Research Foundation, the Canadian International Grains Institute and the Canadian Malting Barley Technical Centre.

The deduction will be mandated by government for the transition period. In the meantime, we are discussing with industry a long-term mechanism to support research and market development in order to keep our great industry moving forward.

As Keith Degenhardt, chairman of the Western Grains Research Foundation, wrote to the Minister of Agriculture and Agri-Food, “The Canadian Wheat Board method of collecting the check-off is certainly not the only method of collecting wheat and barley check-offs”.

Many have expressed concerns about the future of the port of Churchill which depends upon Canadian Wheat Board shipments for the majority of its business. Our government knows how important the port of Churchill is to the strength and growth of our northern economy. The port is part of the government's overall northern strategy, setting out a vibrant vision for the north and it will remain the Prairies' Arctic gateway to the world.

Over the past four years, we have invested close to $40 million, $37.4 million to be exact, to improve the port's facilities, including rail and air access. We are backing up that commitment with a concrete plan to support a strong future for the port following the introduction of marketing freedom for western grain and barley growers.

As the first phase, we are investing federal funds to provide timely support for Churchill. For the second phase, once we know better the impact of marketing freedom on the port, we will decide what new initiatives will be needed to drive a bright future for the port. We will continue to work with all stakeholders to explore new opportunities for this vital northern asset.

We are also very encouraged by the willingness and positive outlook of owners OmniTRAX, the largest privately held rail service in North America, to sit down with us to develop a business plan and chart a way forward for Canada's only major northern seaport.

As for grain industry jobs, while we will see some job losses at the Canadian Wheat Board initially, we expect private grain marketers and processors to expand and start up new businesses in Canada. In fact, Milton Boyd, a professor and economist at the University of Manitoba, believes, “Just as creation of the Board in the 1930s shifted some jobs away from the private grain firms, removal of the board's monopoly in 2012 would shift some jobs back to the private grain firms.”

Milling firms will be able to purchase directly from the farmer of their choice at whatever price they negotiate. Entrepreneurs will have the option of starting up their own small specialty flour mills, malting and pasta plants.

As Brian Otto, president of the Western Barley Growers Association, said, “Canadian millers will have the opportunity to develop niche contracting programs to satisfy needs for specific traits”. He also believes, “Minor classes of wheat will find new, robust markets that were ignored under the single desk because they were too small”.

The future of our agriculture industry is bright. We have seen tremendous growth in value-added opportunities for oats, pulses and canola across the Prairies over the past 20 years. We will see these same opportunities open up for wheat and barley as we implement marketing freedom, just as we saw in Saskatchewan a few weeks ago.

We will work with farmers and industry to attract investment, encourage innovation, create value-added jobs and build a stronger economy. By taking this historic and decisive action to ensure certainty and clarity for producers who will soon be entering into forward contracts for their 2012 crop, this will create opportunities in the grain market and respect western wheat and barley farmers' property rights, rights upon which our nation was built.

I urge opposition members of the House to support the bill. Its timely passage will give farmers the certainty they need to plan their business decisions for the coming year. We will free farmers to feed families around the world with the safe, high quality wheat and barley they are so proud of.

Marketing Freedom for Grain Farmers Act
Government Orders

3:20 p.m.

Liberal

Frank Valeriote Guelph, ON

Mr. Speaker, the member for Red Deer is aware of a recent article in The Wall Street Journal that lauded the Wheat Board's demise because of the increased profits for grain companies, yet an article in The Economist warns of the tragedy that would prevail in western provinces with the closure of small farms and the negative impact that it would have on small farming communities.

Why is the member prepared to sacrifice the well-being of so many for the well-being and profits of so few?

Marketing Freedom for Grain Farmers Act
Government Orders

3:20 p.m.

Conservative

Earl Dreeshen Red Deer, AB

Mr. Speaker, I am thankful that the member for Guelph has asked me that question, because he is talking to a farmer from western Canada who has a family farm that has been there since 1903.

There were types of things we were forced to do when we were told that we would not be able to market the wheat and barley that we produced. It pushed us into producing flax and canola in order to get some cash flow. When farmers produce their crop and then find out they are not going to get paid for it for 18 months and then are subject to all of the different things that are happening because of the Canadian Wheat Board, these are the kinds of changes that we believe are going to increase the family farm. This is the reason we will be able to ask our sons and daughters to come back and create the family farm that we all have dreamed of.

Marketing Freedom for Grain Farmers Act
Government Orders

3:20 p.m.

Cypress Hills—Grasslands
Saskatchewan

Conservative

David Anderson Parliamentary Secretary to the Minister of Natural Resources and for the Canadian Wheat Board

Mr. Speaker, I want to follow up on the comment the member just made, because he is educating the folks across the way.

We farm as well. Two years ago, we had durum in our bin. The Wheat Board said it would contract 60% of it. The person who was farming our land had found a market for the other 40% in the United States. When he went to the Wheat Board and said he would like to do a buy-back, meaning we would have to buy our own grain back to sell it, the Wheat Board told him “absolutely not”. When he asked why, the Wheat Board said it was not contracting the other 40%, so he could not sell it. When he asked what he was supposed to do, he was told to leave that 40% of the crop in the bin until next year and the Wheat Board would see if it would deal with it then.

Has the member had that type of experience in dealing with the Canadian Wheat Board when trying to market his grain? The question directly relates to having to grow canola and flax and those kinds of crops in order to have cash flow on a farm. I would be interested in hearing if the member has any of those stories or experiences as well.

Marketing Freedom for Grain Farmers Act
Government Orders

3:20 p.m.

Conservative

Earl Dreeshen Red Deer, AB

Mr. Speaker, I would like to thank the member for that question as well as for all the work he has done to help give marketing freedom for farmers.

I can think back to the different operations involved on our farm. I started farming 40 years ago, so I have been filling out a Canadian Wheat Board permit for the last 40 years and I know the types of things that have happened and the concerns we have in central Alberta.

First, farmers are not able to get delivery contracts when they require them. Second, when the Canadian Wheat Board decides it wants to move some of our grain, a lot of the time we find that it happens to be when the road bans are on. If that does not work, then it says we had better have it delivered while we are trying to put our crops in. Finally, sometime in the summer we are able to get that pushed in there because we have to ensure it is done before July 31. Those are just part of the concerns that one has.

Then when we take a look at the dollars being returned to the Canadian farmer compared to the dollars we find elsewhere, we can see it is one of the reasons that the family farm has the problems it has now.

These are some of the things we have to consider.

Marketing Freedom for Grain Farmers Act
Government Orders

3:25 p.m.

Liberal

Ralph Goodale Wascana, SK

Mr. Speaker, it is a pleasure to take part in this debate. It is obviously a debate that provokes a great deal of emotion, and I suppose that is understandable.

The grain industry in western Canada has always been a source of considerable controversy. That is because it is a multi-billion dollar industry. It has huge importance to the livelihoods and way of life of many prairie families.

Its structure is also significant, with tens of thousands of individual farmers on one side, most of them in family farm operations, and then a few large corporations on the other side, namely the railways and grain companies--many of them foreign-controlled--that run the grain handling and transportation system.

It is an inherently uneven playing field, and farmers, sadly, are positioned to get the short end of the stick. Down through the years, various attempts have been made by producers, communities, farm organizations, governments and others to correct or at least to try to offset that imbalance. The strongest effort, and certainly the most successful, has come through the Canadian Wheat Board.

After a number of dubious experiences with previous open markets and many failed experiments with voluntary pooling over the years, the Wheat Board was first created--by a Conservative government, incidentally--in 1935. It was given many of its essential single desk characteristics by a Liberal government in 1943.

It is interesting to note that for several decades after 1943, the board's existence was actually considered to be temporary, and it had to have its powers renewed by Parliament by a vote in this House every few years.

They were, of course, renewed year after year, decade after decade, because those powers exercised by the Canadian Wheat Board had proven to be effective. Farmers over those years effectively wanted and supported the board. Successive federal governments, both Liberal and Conservative, acted on the farmers' opinion that the Canadian Wheat Board's mandate should be renewed.

The last major revision of the Wheat Board's structure came in 1997. As the minister at that time, I knew our government had four primary objectives in the legislation that it introduced in 1997. That legislation came into effect on January 1, 1998.

The first objective was to make the Canadian Wheat Board a truly producer-controlled operation. It is, as a result of that legislation, no longer a crown corporation. It is not a government entity run by five hand-picked servants of the government beholden only to the government. Instead it is a modern marketing organization controlled and operated by farmers themselves. That was the first objective of that legislation 13 years ago.

Second, we needed to make that producer control legitimate and accountable by making the Canadian Wheat Board fully democratic. Farmers themselves now elect the overwhelming majority of the board of directors of the Canadian Wheat Board, which is an innovation that has existed in the law only since 1998. Farmers elect 10 of the 15 directors on the Canadian Wheat Board. Obviously, if the farmers do not like what those directors do, they can be voted out of office. The elections occur every two years on a rotating basis.

It is interesting to note that down through the years since 1998, 80% of the farmers elected, re-elected and then re-elected, in some cases, by their peers to serve on the Canadian Wheat Board's board of directors have been strong supporters of the single desk system. That is like a referendum that happens every two years, and the single desk side in that vote wins 80% of the time.

That was the second objective: to make the Canadian Wheat Board not only producer-controlled, but democratic in its operations.

Third, these directors were given the scope, the mandate and the power to innovate, to change, to be flexible, to provide prairie producers with an unprecedented range of options and alternatives in how grain is marketed and how farmers are paid for their grain, and the board has delivered on that mandate over the last number of years by introducing a number of groundbreaking innovations in the board's operations.

As this debate has raged over the last number of weeks and months, I have heard a number of farmers make the point that in many ways the criticisms we hear these days about the board's operations are really about the old board, the way it used to exist before 1998, before democratic producer control took over. That old board was gone more than a decade ago. Since then, there has obviously been a dramatic improvement.

Principle number one was producer control. Principle number two was democratic operations. Principle number three was flexibility, innovation and accountability. Principle number four was this: for the future, we built into the law a clear provision to put the ultimate fate of the Canadian Wheat Board in the hands of farmers themselves.

Section 47.1 of the existing act does not prohibit changes to the single desk. It does not prohibit even the elimination of the single desk. However, it makes it clear that the decision is one for farmers to take. It is not for politicians or bureaucrats, but for farmers themselves. Section 47.1 embeds in the law the principle that there ought to be a plebiscite, a vote, held among prairie farmers to determine whether or not the nature of the single desk ought to be changed.

Before legislation like Bill C-18 can be legally introduced in this House, the government is obliged to consult with the Canadian Wheat Board's board of directors, and it is obliged to hold a vote among farmers on the specific changes it is proposing to make.

No such vote has been held by the government prior to introducing Bill C-18.

The minister says he is not obliged to have a vote because he is not making any kind of technical change to the single desk. He is not making small modifications to the way the single desk operates. He says that if he were making changes of that kind, then in fact he would be obliged to come to farmers through a vote or a plebiscite to get the farmers' opinions on what he is proposing to do.

The minister says that he is not obliged to do that in this case because he is not making smaller technical changes to the single desk: he is simply abolishing it altogether.

Let us think about that logic. It is like the doctor saying, as the patient being wheeled into surgery, “Well, if I am just going to take out your tonsils, I will do you the courtesy of asking for your opinions, but if what I have in mind is euthanasia, killing you altogether, I will not bother to ask for your advice”.

Obviously the government's position is ludicrous on that point. The legislation has the effect of destroying the single desk, and accordingly section 47.1 obliges the government to get the opinion of farmers before they take that step. The government has not done so, and therefore, in our opinion, this legislation is not proceeding properly at this time.

Liberals in Parliament will not support this legislation, Bill C-18, to kill the single desk marketing system for the Canadian Wheat Board for at least four strong reasons.

The first one has to do with process. The CWB is now democratically controlled and operated by western Canadian grain producers. Today's legislation eliminates that democratic producer control, and it replaces it with direct and complete government control. The elected producer directors will be gone, and instead the board will be run only by five people appointed by the government.

The Conservatives are also disenfranchising farmers by ignoring their legal obligation as it exists today to hold a producer plebiscite before introducing any legislation that has the effect of destroying the single desk. That is our first reason for opposing this legislation: the attack on democracy, the attack on proper process, the ignoring of the right of farmers to vote.

Our second reason is one of cost. By killing the single desk operation, the government is effectively reducing the value of Canadian wheat and barley in global markets by as much as $400 million to $600 million per year. That is the typical price premium that the Canadian Wheat Board is able to gain every year for western farmers and bring into the Canadian economy because of its ability to price discriminate.

The ability to price discriminate depends exclusively upon the existence of the single desk operation. If we have a single desk operation, we can go to each individual grain market in the world and extract the highest price available in that market. Obviously, the higher priced markets in Europe such as the high scale department stores and food stores in London, England, will pay a higher price than will Yap Milling in Indonesia. They are two entirely different markets. If we have a single desk operation, we can distinguish between those markets. We can get the top price in London and the top price in Indonesia and they are not the same price.

If there is leakage everywhere because there is no single desk operation, we will then be competing for the bottom price. It would be a race for the bottom price. We will end up with the lowest price rather than the top price available in each individual market.

Without the single desk operation we will lose the ability to price discriminate. According to many experts in the industry, the cost of that will be roughly $400 billion to $600 billion a year depending on the marketing year. Without the single desk operation, the ability and the clout to price discriminate will be gone.

The third reason is that the government's new legislation will also reduce farmers' clout here at home.

There will be a lot of collateral damage with the loss of the Wheat Board. For example, the producers' right to load their own rail cars as a safety valve against commercial exploitation will technically remain in the wording of the Canada Grain Act. However, without the Canadian Wheat Board to give producer car shipments logistical priority that right will be largely meaningless.

I note that the report the government commissioned on so-called marketing freedom which was published a few weeks ago clearly makes the point that the right to access producer cars, not actually the effective functioning of producer cars but just the access to producer cars, will continue in the Canada Grain Act. However, that report specifically states they would not be given any priority in the system. Therefore, we can order our producer car and we might get it three years from now if there happens to be nothing else happening at the time. It is a right without any meaningful application unless we have someone who is managing the logistics of the system and will give the producer car some priority.

Similarly, producer-owned grain terminals and short-line rail operations will be at the mercy of large grain companies and the railways. The grain companies and the railways have always opposed the existence of the producer-owned grain terminals and short-line rail operations because it means that grain goes around their system, it provides competition and they do not get the tariffs and the fees. Obviously, they are not going to be conducive to allowing those innovations to continue to be used in the system.

What is most important in terms of collateral damage is there will be no player in the western grain handling and transportation system with the clout and the will to stand up for farmers and to take on entities like the railways when their services fail, which happens about 50% of the time according to the government's own rail service review, or when the railways attempt to extract excessive freight rates.

That is the third reason why we cannot support the legislation.

Finally, the Conservative government is about to hand to the United States a huge trade freebie.

The elimination of the Canadian Wheat Board has been the Americans' number one trade objective in North America for the past 20 to 25 years. Courtesy of the Conservative government, the U.S. is about to receive its fondest wish and Canada will get absolutely nothing in return.

The Canadian Wheat Board's single desk system as well as its clout and ability to outdo the American grain marketing system will be gone but Canada will have no better access to the U.S. market. Country of origin labelling discrimination against Canada will continue. The buy America trade discrimination against Canada will continue. The new U.S. marine tax discrimination against Canada will go on. Border thickening will continue. U.S. discrimination against Canadians working in the defence industry will continue. The U.S. attack on Canadian softwood lumber will continue. U.S. authorities will continue to close the border to Canadian wheat and other products whenever it suits them. Thus, Canada has gained absolutely nothing from its unilateral disarmament in the grain trade.

I reiterate that there will be a failure to apply due process and recognize the producer democratic control of the Canadian Wheat Board. There will be an imposition of new costs on farmers and a loss of value to the tune of $400 million to $600 million a year in terms of price premiums left on the table and not captured for western Canadian producers. As well, there will be a loss of clout in terms of dealing with other aspects of the grain handling and transportation system, especially regarding the ability to take on the railways when necessary.

I would note on that last point, that on at least two occasions in the last few years the Canadian Wheat Board has taken the railways to the Canadian Transportation Agency. As a result of those proceedings, it won the farmers something in the order of $200 million in excess freight charges. That was money that was taken out of farmers' pockets. The Wheat Board put that money back into farmers' pockets. The bill will remove that authority, that ability and that clout.

This is a unilateral disarmament of the Canadian farmer. The Americans are giving up absolutely nothing and will not even guarantee absolute access to the U.S. grain market. However, the Canadian Wheat Board, a pillar of the system in Canada, will be gone.

For all of those reasons we oppose the bill.

We propose an amendment to the motion that is presently before the House.

I move:

That the amendment be amended by adding after the words "70 years" the following:

“, including specifically the elimination of the Canadian Wheat Board's role in managing transportation logistics and thereby leaving farmers without an effective voice with respect to rail service levels and freight rates; and (d) breaches section 47.1 of the Canadian Wheat Board Act”.