Bill C-39 (Historical)

An Act to amend the Canada Grain Act, chapter 22 of the Statutes of Canada, 1998 and chapter 25 of the Statutes of Canada, 2004

This enactment amends the Canada Grain Act by
(a) clarifying the Canadian Grain Commission’s objects;
(b) combining terminal elevators and transfer elevators into a single class of elevators called “terminal elevators”;
(c) eliminating mandatory inward inspection and weighing as well as some requirements for weigh-overs at elevators;
(d) extending the right to require the Commission to determine the grade and dockage of grain at process elevators and grain dealers’ premises;
(e) eliminating the Grain Appeal Tribunals;
(f) eliminating the Commission’s ability to require security as a condition for obtaining or maintaining a licence;
(g) creating additional regulatory powers for the Commission;
(h) modifying enforcement provisions and creating certain new offences; and
(i) ensuring that some of the requirements and procedures set out are clarified and modernized and that certain language is updated.
The enactment also amends An Act to amend the Canada Grain Act and the Agriculture and Agri-Food Administrative Monetary Penalties Act and to repeal the Grain Futures Act as well as another Act, and includes transitional provisions and coordinating amendments.

[Brian Storseth, Conservative, Westlock—St. Paul, AB]

Thank you very much, Mr. Chair.

At the beginning or outset here, I'm a little surprised by Mr. Boshcoff and wonder whether he could table the examples of the differences he had in mind at the end of the committee for members. We had Ian White and Elwin Hermanson here at the last meeting, who both assured us they had no problems with Bill C-39 or with the implementation of KVDs.

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

Thank you very much, and thanks to you, Minister, and your officials for being here today. I will try to be brief in my questions and hopefully give you a chance to respond, perhaps in the order that I ask them.

First I'd like to follow up on what Wayne mentioned in regard to the press release about the Grain Commission. It's a disturbing press release, and I'd like some comment from you on this. According to the press release, the Grain Commission producer protection programs will be slashed by 67%, while grain quality programs will be reduced by almost half and research programs will be cut by 60%.

There are three former commissioners who have statements in this release.

One says that “As Ottawa's contribution goes down, producer costs will rise.” I find that extremely disturbing and I'd like some comments on that.

The other one is that, “These cuts will undermine grain producers in their dealings with grain companies, which have never been more powerful. Canada's reputation for top quality grain will be hurt too. You can't protect producers and make these cuts at the same time.” This is former commissioner Bob Douglas.

The last quotation I have here is by Ms. Donna Welke: “At a time when food safety is a top priority for Canadians, Bill C-39 is undermining the safety of Canadian grain products.”

I'd like a comment on those statements, please.

Minister, you mentioned COOL and how we oppose this. I'm just wondering how realistic it is to go to a panel. Do we have some very specific concrete measures as to how to oppose COOL, and does this fit in with shifting our focus to not always trying to conform to trade obligations, but maybe to shift to really put Canada first and make sure we stand up and put in the right measures to protect our producers?

That also goes in line with the tree fruit industry, as you mentioned. You're saying the market will just regulate it. We're producing grapes; the logical result is that eventually we'll be a nation of grape producers and we won't have any more apples, for example. Is that a realistic goal for Canada, or should there be some government intervention to ensure that we have a safe supply of apples and peaches and all the other fruit we're noted for? That's the second one.

I will probably need you to get back to me on my last question. Can you provide the committee with a breakdown of federal grants and contributions by province for the following programs: Greencover, the environmental farm plan, the farm stewardship program, and the Canada-Ontario water supply expansion program for the fiscal years 2004-05, 2005-06, 2006-07, and 2007-08? I have it here if you need it.

[The Chair, Conservative, James Bezan]

I want to thank Mr. White, Mr. Hermanson, Mr. Stuart, and Mr. Dennis for your briefing today on KVD, and Mr. White as well previously on the Wheat Board. I found it very educational and informative, and it will allow us to move ahead as a committee, especially as we consider Bill C-39 when it comes back to the House.

With that, I will entertain a motion to adjourn. Mr. Lauzon.

The meeting is adjourned.

Business of the House

[Peter Van Loan, Conservative, Leader of the Government in the House of Commons and Minister for Democratic Reform]

Mr. Speaker, the government took a major step forward this week to maintain a competitive economy, our theme for this week, and I am happy to advise the House that yesterday the Standing Committee on Finance agreed to report the budget implementation bill back to the House by May 28.

This is excellent news. The budget bill ensures a balanced budget, controls spending, and invests in priority areas.

This week also saw the passage of Bill C-23, which amends the Canada Marine Act, and Bill C-5 on nuclear liability at report stage.

Today, we are debating a confidence motion on the government’s handling of the economy. We fully expect, notwithstanding the minority status of our government, that this House of Commons will, once again, express its support for the government’s sound management of Canada’s finances and the economy.

Tomorrow, will we continue with maintaining a competitive economy week by debating our bill to implement our free trade agreement with the countries of the European Free Trade Association. It is the first free trade agreement signed in six years and represents our commitment to finding new markets for the goods and services Canadians produce.

If there is time, we will also debate Bill C-14, which would allow enterprises choice for communicating with customers; Bill C-7, to modernize our aeronautics sector; Bill C-32, to modernize our fisheries sector; Bill C-43, to modernize our custom rules; Bill C-39, to modernize the Grain Act for farmers; and Bill C-46, to give farmers more choice in marketing grain.

The government believes strongly in the principle of democracy and the fundamental importance of human rights. Next week we will show our support for that with strengthening democracy and human rights week. The week will start with debate on Bill C-30, our specific land claims bill. The bill would create an independent tribunal made up of superior court judges to help resolve the specific claims of first nations and will, hopefully, speed up the resolution about standing claims.

We will debate Bill C-34, which is our bill to give effect to the Tsawwassen First Nation final agreement. We will debate our bill to provide basic rights to on reserve individuals, Bill C-47, to protect them and their children in the event of a relationship breakdown, rights that off reserve Canadians enjoy every day.

As I said, we are committed to strengthening democracy in Canada. Yesterday, I had an excellent discussion on Senate reform with members of the Senate legal and constitutional affairs committee. That discussion will continue in this House next week when we debate our bill to limit the terms of senators to eight years from the current maximum of 45, as foreseen in Bill C-19.

We will also debate our bill to close the loophole used by leadership candidates to bypass the personal contribution limit provisions of the election financing laws with large, personal loans from wealthy powerful individuals and ensure we eliminate the influence of big money in the political process.

With regard to the question about estimates, there are, as the opposition House leader knows, two evenings that must be scheduled for committee of the whole in the House to deal with those estimates. Those days will be scheduled over the next two weeks that we sit so they may be completed before May 31, as contemplated in the Standing Orders.

There have been consultations, Mr. Speaker, and I believe you would find the unanimous consent of the House for the following:

That, notwithstanding any Standing Order or usual practices of the House, on Friday, May 9, starting at noon and ending at the normal hour of daily adjournment, no quorum calls, dilatory motions or requests for unanimous consent shall be received by the Chair.

[Peter Van Loan, Conservative, Leader of the Government in the House of Commons and Minister for Democratic Reform]

Mr. Speaker, our week devoted to action on the environment and health of Canadians is proving to be a success. We just passed Bill C-33 at report stage with the support of two of the other three parties. This is our bill requiring that by 2010 5% of gasoline and by 2012 2% of diesel fuel and home heating oil be comprised of renewable fuels. It represents an important part of our plan to reduce greenhouse gas emissions by 20% by 2020. Debate of this bill at third reading will now be able to commence tomorrow.

We have also started to debate two bills to improve the safety of food, consumer products and medical products in Canada.

On Monday we debated Bill C-52, to create the Canada Consumer Product Safety Act and yesterday we debated Bill C-51, to modernize the Food and Drugs Act.

We also introduced Bill C-54, to promote safety and security with respect to human pathogens and toxins. We will continue to debate these bills today and tomorrow.

During these uncertain economic times to the south, our government has led the way on the economy by taking decisive and early action over the past six months to pay down debt, reduce taxes to stimulate the economy and create jobs, and provide targeted support to key industries. In keeping with our strong leadership on the economy, next week will be maintaining a competitive economy week.

We plan to debate the following bills intended to enhance the competitiveness of certain sectors of the Canadian economy: our Bill C-23, at third reading stage, to amend the Canada Marine Act; our Bill C-5, at report stage, on liability in case of a nuclear incident; and our Bill C-14, at second reading stage, to amend the Canada Post Corporation Act.

We will also debate at second reading Bill C-32, which modernizes the Fisheries Act, Bill C-43, which amends the Customs Act, and Bill C-39, which amends the Canada Grain Act. We will also begin to debate Bill C-46. This is our bill to free western barley producers from the Canadian Wheat Board monopoly by giving them the freedom to market their own products. We will debate at third reading our bill to amend the Aeronautics Act, Bill C-7.

My friend, the member for Wascana, the Liberal House leader, said that government business and the doing of business in the House of Commons appeared to end on Tuesday. That is because next Wednesday and Thursday will be opposition days, and I would like to allot them as such at this time.

In terms of the question he raised with regard to Bill C-293, which is a private member's bill, I understand it is scheduled to come before the House in early May. At that time the House will have an opportunity to deal with the matter.

In terms of estimates and witnesses appearing before committee of the whole, the government does have to designate those to occur before May 31. Late last night I finally received notice of which two departments were identified and we will soon be advising the House of the dates that will be scheduled for consideration of those matters in committee of the whole.

[Terry Pugh]

Thank you very much for the opportunity to present to the committee by video conference. We appreciate it.

We haven't had a lot of time to look at this trade agreement, but it's clear that it's one of a series of bilateral trade agreements that Canada is pursuing. They're all in conjunction with the larger trade agreement, the WTO, so it's important to look at this in the context of the WTO.

The bottom line for measuring success or failure of any trade agreement from the farmers' perspective is whether that trade agreement actually raises farmers' net income. A trade agreement that boosts exports but results in lower net farm income is not a good deal for Canadian farmers.

That being said, there is actually one positive thing in this agreement that I've seen, and that is on durum wheat. It's perhaps the only positive aspect of this trade deal that I've found. Because durum exports are made through the Canadian Wheat Board, the farmers of western Canada are the direct beneficiaries of those sales and more money is going right back to the farm gate. If those sales were made through private grain companies, there would be considerably less going back to the farm gate. So an increase in sales as a result of lower tariffs in some of these countries will actually translate into increased direct revenue for farmers.

Of course, the Wheat Board has done a tremendous job marketing durum in Europe. You're probably aware that the EU is our biggest customer already for durum wheat. Canada grows only a little over 12% of world durum production, but we actually ship 51.8% of durum globally.

Right now Switzerland isn't a big market for us. From the best estimates we've seen, we only ship about 1,500 tonnes, and the tariff rate is already very low. Norway is a little bigger, and right now we export no durum to Norway. So if we are increasing those exports, that will probably help us.

But it's important to keep in mind that Canadian wheat and durum exports are a big draw for our overseas customers because of the consistent quality and reliability of those grains. That's due to the Canadian Wheat Board sales regulations that are in place, the Canadian Grain Commission, and our system of kernel visual distinguishability.

Both of those agencies are under severe stress right now. The Canadian Grain Commission, under Bill C-39, is faced with the loss of inward inspection. As you're probably aware, the KVD system, which is the key cornerstone of our grain quality system, is going to be phased out on August 1, 2008. If that happens, there is a real concern about whether we're going to be able to keep those markets. So even if we gain something with these duty tariff reductions, we may lose many millions more if we lose the Canadian Grain Commission and the Canadian Wheat Board single desk.

I was a little surprised, in reading some of the transcripts, that no economic analysis has been done on the implications of this trade deal. I think that speaks volumes. We've seen a similar lack of economic analysis in Bill C-46, which will change the Canadian Wheat Board Act and the Grain Commission. We haven't seen any economic analysis by the government on what will happen to farm incomes if those two agencies are weakened in any way.

But the most critical and highly negative aspect of this deal, from our point of view, is its impact on supply management, for example, in the dairy industry. It's true that our access commitments remain in place for imports of certain commodities, as specified under the WTO agreement, but the tariff rates on some of those imports have been dramatically lowered, some of them to the point of elimination entirely.

It's good when the tariff rates on our exports are reduced. It's another matter when we see tariff rates on imports of dairy products, for example, coming into Canada reduced.... I think the Ag Canada representative, in early March, pointed out that, for example, on butter, under 4,000 tonnes of butter coming into Canada, which is our access quota, right now under the WTO--that's a 7% tariff. Under this deal, that 7% goes down to 0%. That is, without a doubt, a tariff cut from 7% down to 0%. The amount that's coming in stays the same, but the tariff rate is actually reduced.

That is a key point, because what that does is effectively facilitate access to the Canadian market for imports of dairy products. We have to keep in mind that the more we open up our market to imports, the more we shut out Canadian producers from their own domestic market. As I pointed out, that cut from 7% to 0% for some dairy products coming in is definitely a cut in tariff rates.

A little over two months ago, Agriculture Minister Gerry Ritz stated in response to a revised WTO draft modalities text, “Canada maintains its firm opposition to any tariff cuts or tariff quota expansion for sensitive products. This represents a fundamental element of Canada’s negotiating position.”

I'll just finish up by saying that that statement from Gerry Ritz was released two weeks after this agreement was signed, when he certainly should have been well aware that there were tariff cuts. So when he said there will be no tariff cuts at the WTO, it makes us wonder whether the government is perhaps putting on a public show of resisting this push at the WTO for reductions in tariffs; but it's actually willing to cut tariffs on a small bilateral trade deal, so how can it refuse to do so on the larger WTO deal?

This agreement actually appears to have set a precedent that may well facilitate ongoing trade measures that weaken Canada's supply management and orderly marketing systems.

I'll conclude with those remarks.

[Wayne Easter, Liberal, Malpeque, PE]

The reason was that Adrian Meisner stood up to the minister on behalf of his board of directors, who were elected by producers, and the Prime Minister didn't like it, and he was fired.

Ms. Keen did her job for the same reason, and the Prime Minister didn't like her standing by the laws of the land, so she was fired.

In this case Mr. Hermanson in his remarks basically said, “The Values and Ethics Code for the Public Service also clearly states that public servants must loyally implement ministerial decisions, lawfully taken.” Well, the article on Bill C-39 was not the law. The law is what I showed you earlier in that big binder, the Canadian Grain Commission Act. That's the law. This is a proposed law. There are lots of concerns. We're hearing from the agriculture union and concerns from producers over many areas in Bill C-39or the Canadian Grain Commission changes.

Mr. Hermanson said, and I quote in the article, “As chief commissioner of the CGC, I strongly support this legislation and reiterate this organization's commitment to providing producers with value.” Well, that is basically, in my view, the minister's voice. I don't want to hear the minister's voice. I want to hear independent opinion from the Canadian Grain Commission based on their mandate.

When we call the chief commissioner before this committee in his capacity when we're reviewing Bill C-39, I expect him to answer with a position of independence. Some of it will agree with the minister; some of it will disagree. But to make a blanket statement, “I strongly support this legislation”, very shortly after it came out, when there are so many concerns by producers out there, shows me there isn't the independence from the government that's necessary for this position.

[The Chair, Conservative, James Bezan]

I'm sure we'll see you here again, as we often call the Canadian Grain Commission before committee for their expert witness on various issues, and will do so for the upcoming Bill C-39 when it gets to committee.

Mr. Atamanenko, the floor is yours.

[Elwin Hermanson]

I'll try to keep it very short.

I do not believe it was a mistake. The bill that was tabled was not hypothetical. We weren't talking about a hypothetical piece of legislation. We were talking about actual tabled legislation upon which we have had input. These issues were discussed, and the commission was providing input back. I know that as early as 2002—because I have the independent report that was received in 2002—the commission has had input on these very issues through the evolution of what is now Bill C-39.

Producers and stakeholders wanted to know what the impact of Bill C-39 would be, and we tried as honestly as we could to communicate that. I think that's a proper role for the Canadian Grain Commission to play. It would be irresponsible not to communicate to producers what the impact of the bill would be.

I don't think that as members you would argue that eliminating mandatory procedures at the commission that I think most members feel are unnecessary is an unwise thing. Our mandate under the existing Canada Grain Act is to work to the benefit of producers. That is our mandate, and in the communication of the impact of Bill C-39, I believe we were fulfilling that mandate.

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

Mr. Hermanson, I will tell you the difference. If Bill C-39 had become law, I would never had faulted you for having written such an op-ed article stating that the legislation had to be implemented, because that would have been your job. It does not matter whether the bill had been passed unanimously or on division, Parliament would have enacted legislation and it would have been your job as chief commissioner of the Canadian Grains Commission to implement whatever law Parliament passes. This is normal. The problem is that you commented on a bill before it was passed.

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

Thank you.

Mr. Hermanson, the least one could say is that you are luckier than Adrian Measner and Linda Keen. Do you think these people would have lost their job if they had done what you did?

You were barely appointed when you staked a position by writing this open letter on Bill C-39 published in The Western Producer. All the colleagues around the table here have mentioned this op-ed piece of February 7. You were appointed on January 21.

Personally, I religiously read The Western Producer just as I read La Terre de chez nous, because I want to also know what is happening out West. When I read this piece, my feeling was that a senior official who had just been appointed, you were carrying the minister's and the government's message and that this was pure partisanship since Parliament has not even finished considering this bill. You must have known that it is controversial. A memo was even sent to employees to tell them that they had no right to speak about it if their comments were critical of the government. You will not admit that this is a gag order, but I call this censorship. People only have a right to speak if they will not criticize. You knew then that the bill was attracting criticism and that it was in the government pipeline, but you nevertheless went ahead with this open letter saying that you support Bill C-39 as is. In my view, this was a partisan comment.

You did what Mr. Measner and Ms. Keen refused to do. They lost their job and you kept yours.

[Elwin Hermanson]

It wasn't supportive of the government; it supported the objectives of Bill C-39.

[Lloyd St. Amand, Liberal, Brant, ON]

I understand.

Would you agree that your Bill C-39 op-ed was very supportive of the government?

[Lloyd St. Amand, Liberal, Brant, ON]

I mean this in an inoffensive fashion, so please don't misunderstand or take personal offence. But when I read the op-ed piece, which is a glowing, almost gushy endorsement of C-39, and when I factor in the timing of it and some of your presentation this morning, I'm concerned, frankly, that you see your role as being almost blindly, unwaveringly supportive of the government, almost to the point where you would see the commission as being something of a lackey or a lapdog to the government.

Tell me why that's not a fair comment.

[Elwin Hermanson]

It's one of the first things I did, and as I mentioned--I can't remember if it was in my statement, I reiterate it if it was--it was a management decision that was recommended to me. And that management decision had been made even before I assumed the position on January 21. The management team thought that the new chief commissioner should be introduced, should clarify some issues around Bill C-39, and should assure producers that grain quality assurance and the Canada Grain Act would be complied with.

That was brought to my attention, and I agreed with that. We made a few changes. Actually, I toned some things down, if you can believe that, and we submitted it.