Bill C-18 (Historical)

Marketing Freedom for Grain Farmers Act

An Act to reorganize the Canadian Wheat Board and to make consequential and related amendments to certain Acts

Part 1 of this enactment amends the Canadian Wheat Board Act to change the governance structure of the Canadian Wheat Board and to make other changes in preparation for the implementation of Parts 2 and 3. Part 2 replaces the Canadian Wheat Board Act with a new Act that continues the Canadian Wheat Board and charges it with the marketing of grain through voluntary pooling. Part 3 provides for the possible continuation of the Board under other federal legislation, while Part 4 provides for its winding up if no such continuation occurs. Finally, Part 5 provides for the repeal of the new Act enacted by Part 2.

Marketing Freedom for Grain Farmers Act

[Malcolm Allen, NDP, Welland, ON]

Mr. Speaker, I am not sure I would agree with the hon. member's comment at the front end.

Nonetheless, as to the question not being the way we wanted it when it was asked at the plebiscite, 62% of western farmers said they wanted to keep the Wheat Board. If that was not a good question or a fair question, let us craft one and ask them.

I agree with my friend who says that coming from Alberta he understands the Wheat Board and wheat farmers. To say that just because we come from Ontario we do not understand wheat farmers or we have not learned to understand what it is about them, I do not think is necessarily a fair comment.

The bottom line is that if we ask farmers a fair question and the decision is to not have a wheat board, so be it. However, if the response is that the farmers want to keep it, then so be it also.

[Wayne Easter, Liberal, Malpeque, PE]

Mr. Speaker, in the previous discussion, surely the government would extend the same rights to western farmers as it did extend to those on the Ontario wheat marketing board who no longer market under that board. They were given the right to make a decision. Western farmers have not been given that right.

I have asked my NDP colleague about one of the arguments of the government that this would be great for processing and that there has been no processing since the board was in place. The facts are these: Canada processes three times more malting barley per capita than the United States; wheat milling capacity in western Canada has grown by 11.8% in the last decade compared to 9% in the northern tiers of the United States; and four new western Canadian mills have been built during that period while the number of mills in the northern United States has remained the same. That has been with a board of directors of farmers in place.

The act, under section 12, says:

Every person holding office as an elected director of the Canadian Wheat Board immediately before the day on which this Part comes into force ceases to hold office on that day.

Have those farmer elected directors not done a good job in increasing processing capacity and in maximizing returns to farmers?

Why does my colleague believe that the government wants to get rid of those farmer elected directors and take their right away to be a master of their own destiny through their own marketing institution, as others in Canada are allowed to do, like dairy and poultry?

[Malcolm Allen, NDP, Welland, ON]

Mr. Speaker, I can only speak to what I believe is the decision not to allow farmer appointed or farmer elected board members.

The government has said that it will allow a voluntary Canadian wheat board. One would think that if it wants it to be voluntary and it believes that it is okay if folks want to join it, at the very least they should be allowed to decide if they want to vote for the folks who want a voluntarily association. One would think that is what the government would want.

One hates to have these thoughts that five folks who are appointed might just want to get rid of it, and that it might be made in such a way that is so draconian that those who actually want to voluntarily be part of it will be driven away by the folks who make decisions in their best interest.

That is why we have democracy. That is why we elect folks. The other side talks about how many of its members were elected and the fact that it has a majority government. True fact. The members could point to the fact that the reason that happened is because folks voted for them. True fact.

If that is the case, why not extend it to those particular farmers, if indeed the government wants a voluntary association, and simply say that at the very least it will give people the right to vote for the folks to represent them on a voluntary association called the Canadian Wheat Board?

Then again, if the government really wants to do that, it should have a plebiscite vote and find out if Canadian farmers really want to keep the Canadian Wheat Board.

[Ted Menzies, Conservative, Minister of State (Finance)]

Mr. Speaker, I have been waiting for 35 years to deliver this speech. That is a long time.

I am a wheat farmer, I must confess. I farmed for over 30 years in Alberta. I stand to speak in favour of the marketing freedom for grain farmers act.

Anyone listening to this debate might wonder why we would have to do that. Do not all farmers have the right to market what they produce? That is partially correct, but only if a farmer lives east of the Manitoba-Ontario border or west of Creston, B.C. All farmers living in between, which is the wheat belt area of this country, have been under the control of a monopoly seller of wheat and barley for human consumption. That is the other thing a lot of people do not understand. It is durum wheat for pasta, bread wheats and barley for malt barley.

We would argue that the producers of those crops should have the same right to the freedom to market, to the same freedom of choice, as farmers who live in Ontario, Prince Edward Island, west of Creston B.C., and in fact all around the world. That is what this whole debate is about. Some members understand that because they have heard that term enough times in the House. Those producers should have the same freedom of choice.

This is the most draconian and outdated marketing system of any country in the world. No other industry would accept this situation. No other industry would have come to Canada. Let us picture the big three automakers coming to Canada to build cars if we had set up a monopoly that would tell the industry what colour of car it could build and what price it would get, and that the industry would get paid 18 months after the monopoly chose to sell that car. We would not have an auto industry, nor would we have a communications industry, if they were harnessed with the same binding regulations that those of us who produce grain in western Canada have.

A new, voluntary Canadian wheat board will be set up once this legislation is passed. It will be an option. Just as I, as a producer of wheat in western Canada, should never have been forced to sell to a monopoly, so have we chosen not to force those who would choose to use a pooling mechanism to not be able to have a pooling option. The Minister of Agriculture has given this a great deal of thought, and he has put in place an option that will provide a pooling mechanism for those who are more comfortable with that approach. We are providing a transition period for this new board to develop a strategy, a five-year period to set this up. We hope that those people who enjoy the aspects of pooling will use this option. I as a wheat producer will not be forced to use it, as I have been through my 30-some years of growing wheat.

Many farmers in western Canada have moved away from this monopoly. As the Minister of Agriculture said in answer to a question the other day, farmers voted with their air seeders. A lot of people in this room do not understand what an air seeder is. It is a seeding mechanism for farms all across the world. Farmers chose not to grow wheat because they could not hedge their price. They knew what their costs were, but they had no way of knowing, through a monopoly, what their price was going to be.

I myself moved away from growing wheat. I only grow it now as a rotation for the health of my soil, for disease control on my farm. Otherwise I grow peas, lentils, chickpeas and canola, because I can market them in the middle of the night anywhere in the world when I see a price that I like.

I have a friend in Australia who grows wheat. When the prices went high in the spring of 2008, the highest we have ever seen, he was able to lock in a price for two years of production because there were companies out there that were willing to do that. He had his sale prices locked in for two years.

I do not know tomorrow what I would get for the wheat that I produce this year. However, I do know that for the wheat harvested on my farm barely two weeks ago, the return to me will not come until January 2013. What other business would accept that as a payment model? I have no idea what the price is going to be, but I know my costs. Why would I grow wheat?

A report came out today stating that our population is going to be 15 billion people in 2100. Who is going to feed those people? It would not be a country held back on production because the farmers could not afford to grow wheat. They would grow other crops--peas, lentils, chickpeas--but they would stop growing wheat if they were held under this monopoly, and we have seen it happen. Wheat acreage has fallen in this country dramatically. We have given up the advantage of some of the new varieties of wheat that could be grown because the Wheat Board is in such an archaic state of mind that we could not develop the new varieties of wheat that would actually help feed the world.

We have seen the yields of corn in the United States triple because of research. We have seen canola varieties producing double of what they were. Where is wheat? It is maybe 10% or 20% more. We have great opportunity for farmers in western Canada to realize the benefits available to them if we can get out from underneath this archaic system.

As I said, cash flow matters to farmers. They are very innovative, they understand their business costs and they need to know how to cover those costs. When they grow another crop that they can market themselves, they can pick a price and sell it. However, under the monopoly powers of the Wheat Board, they do not even know if the crop would actually be moved off their farm in a year.

It is an archaic system. The Wheat Board should never be allowed to decide whether I want to sell my crop, but they have been able to do that. As I say, it is a very archaic system.

I have met grain buyers in other countries. For example, when I was in Cairo, Egypt, food importer brokers asked me why I would not sell them my wheat. I said that they had to deal with the Canadian Wheat Board. They said they had tried, but it would not answer their phone calls.

We have no access to market. If I go back to peas and lentils, I choose whom I want to sell it to and I choose the price I want. I am a price taker, there is no doubt about it, but I can also hedge that price. I can sell it into the future. There are futures markets. There are a whole lot of simple arguments that are being neglected.

I will quote a good friend of mine from southwestern Saskatchewan, Cherilyn Jolly-Nagel. I know her and her folks very well. She is a past president of the Western Canadian Wheat Growers. I quote:

I'm already planning to increase my durum acres next year. It's just the kind of investment that will help boost our economy, boost our profits and help boost the provincial economy.

She is speaking about the first new pasta plant in western Canada, which is being built just outside of Regina, and about the kinds of benefits we will see grow.

There should have been a malt plant in central Alberta. I see the barley going past my house down to Great Falls, Montana. Why is that? It is because the board stopped it from being built in Canada.

We need the freedom. We need the choice. It is that simple.

[Marc Garneau, Liberal, Westmount—Ville-Marie, QC]

Mr. Speaker, I heard my hon. colleague on the other side of the House say that all farmers should have the right to market what they produce and market it as they want. For milk, chicken, turkey and egg producers, who come under supply management, does he advocate exactly the same approach?

[Ted Menzies, Conservative, Macleod, AB]

Mr. Speaker, that is an interesting question. They do have a choice, and they chose a supply management system. This western system was forced on farmers. They never had a plebiscite asking them if they want to sell grain under a monopoly. That was never an option. Supply management is a choice of those farmers, and they welcome that choice.

However, we are missing the point of this whole debate. It is simply about the same choice, as I have said before, that farmers in western Canada do not have: the choice to market our products where and to whom we want, and to provide food for the world.

I go back to my earlier comment. It is very important for Canada, as one of the major food producers in this world, to be able to realize our potential to help feed the world. Our farmers are ready to do it; I wish the House were ready to support it.

[Randall Garrison, NDP, Esquimalt—Juan de Fuca, BC]

Mr. Speaker, it seems that the member was emphasizing that those who participate in supply management had a choice and have voted to participate in something that has restricted their marketing opportunities in some ways but expanded them in many others.

If the Conservatives are so convinced that western farmers do not want the Wheat Board, why do they not conduct a plebiscite at this point and give them the same right to choose that others have had? Why do they not let them vote to see whether western farmers really want to keep the Wheat Board?

[Ted Menzies, Conservative, Macleod, AB]

Mr. Speaker, I realize that a number of members have not been in the House very long, but we have had many discussions about plebiscites. We have had a barley plebiscite. We have had all sorts of plebiscites, and every time a credible question has been asked, the outcome has been that farmers in western Canada want the same freedom as farmers in the rest of Canada. It is that simple.

We also had a plebiscite on May 2. I believe it was a resounding success. We campaigned on freedom. What better thing to campaign on than freedom? We won a majority based on allowing farmers the same freedoms as their friends and relatives in the rest of this country.

[David Wilks, Conservative, Kootenay—Columbia, BC]

Mr. Speaker, my father-in-law switched from grain to beef in the 1990s because he could not make a living on grain.

Once wheat is able to be marketed on the open system, does the member believe there will be an opportunity for families to hand the farms down? I have seen that some people just cannot afford to keep their farm, so they sell it because they are not able to hand it down. Is there an opportunity here for someone like the member to hand that farm down if he or she should choose to do so?

[Ted Menzies, Conservative, Macleod, AB]

Mr. Speaker, I thank my colleague to the west, who is, by the way, still within the Wheat Board's jurisdiction. Just in case he might be thinking about growing wheat and selling it somewhere else before August 1 of next year, I would caution him about that.

In response, this would absolutely be a benefit to what we hear spoken about in this chamber many times, which is the small family farm. Many organic producers decided that was the way for their niche operations to survive. It is not growing broad acre crops on broad acre farms, but niche organic crops.

The Canadian Wheat Board soon stepped in and said it would have none of that. It started marketing the crops for the organic producers who had already set up their own markets. It charged them a premium to sell to the same buyers they were selling to before. The middleman won; the small farmer lost, because of the monopoly powers of the board.

[François Pilon, NDP, Laval—Les Îles, QC]

Mr. Speaker, I rise in the House today to speak against Bill C-18, which would dismantle the Canadian Wheat Board. This bill is a direct attack on family farmers and is a direct affront to the very principle of democracy. On September 12, nearly 60% of Canadian farmers voted in favour of maintaining the Canadian Wheat Board. However, the Conservatives refuse to hold a plebiscite on dismantling the board. The government plans to destroy the single desk against the wishes of Canadian farmers. This would not be the first time that the Conservatives claimed to have received a strong mandate from Canadians with only 40% support.

The Canadian Wheat Board is not funded by Canadian taxpayers. So why are the Conservatives rushing to destroy this organization? The answer is simple. If the Canadian Wheat Board no longer holds the balance of power when negotiating with its economic partners, Canadian farmers will be left on their own, will no longer have any bargaining power and will be forced to sell their wheat and barley at lower prices. That will have disastrous effects.

First of all, Canadian producers will be forced to sell their products at lower prices. Lower selling prices also means lower profit margins. And God knows that during a recession and tough economic times, farmers who are already working in a sector that requires very large financial investments did not need another blow like this.

Furthermore, the Canadian Wheat Board's bargaining power has enabled Canada to maintain some independence for Canadian farmers and the Canadian agri-food industry with respect to the major world players. With the dismantling of the board, this independence will disappear and big American grain companies will be free to move their operations to Canada, which will gradually kill the economic independence of Canada's agri-food industry.

I have heard the Conservatives say that we are trying to scare farmers and that the expected effects are false. Well, I have a little surprise, my friends. By way of comparison, let us look at what happened in Australia after a board similar to the Canadian Wheat Board was dismantled.

Before the Australian Wheat Board was dismantled, Australian wheat could command $99 per tonne over American wheat. After the Australian Wheat Board was dismantled, things went awry. In fact, in December 2008, the price of Australian wheat dropped to $27 per tonne below U.S. wheat. In just three years, the 40,000 farmers who were members of the Australian Wheat Board all became customers of Cargill, one of the world's largest agribusiness corporations, which is privately owned and based in the United States. Once again, it seems as though this government is clearing the way for large American corporations to the economic disadvantage of its own people and voters. Once again, the Conservatives are putting the interests of the private sector ahead of the public interest of Canadians.

Now, here is what we are proposing for Canadian farmers.

We believe in respecting democracy. As a result, we believe that any decision about the Wheat Board must be made by the farmers, since they are the ones who manage this organization. Since 62% of farmers voted against dismantling the Canadian Wheat Board, we believe that the government should respect that decision or, at the very least, hold an official government plebiscite on the issue and, as a result, withdraw its bill.

What do members of the Canadian Wheat Board think of the possible dismantling of their organization? While the Conservatives claim that farmers are overjoyed at this prospect, Allen Orberg, a farmer and chair of the Canadian Wheat Board's board of directors, thinks that this government does not have a plan. In his opinion, the government has done no analysis and its approach is based solely on its blind commitment to marketing freedom. He added that the government's reckless approach will throw Canada's grain industry into disarray, jeopardize a $5 billion a year export sector and shift money from the pockets of Canadian farmers into the hands of American corporations.

What economic impact will this dismantling have on the overall Canadian population? First, Canada risks losing the money brought in through board premiums, which can represent between $200 million and $500 million per year. Second, as I said earlier, being a farmer today means considerable investment, be it in machinery or basic farm upkeep. Dismantling the Canadian Wheat Board will have a domino effect. By selling their product at a lower price, the farmers' profit margin will decrease. Less profit also means less money to pack back loans. That means that, at the end of the day, it is the Canadian taxpayers who will pay because the government will have to increase subsidies for farmers so that they can survive and make a living.

Dismantling the Canadian Wheat Board means that farmers will see their revenues drop considerably. The government will then have to pick the pockets of Canadian taxpayers to fix the disaster it will have created.

To conclude, I implore the government to rethink its decision, to realize that it is going down the wrong path and to understand that it is putting farmers and the Canadian economy at risk. Therefore, it should withdraw Bill C-18.

[Lynne Yelich, Conservative, Minister of State (Western Economic Diversification)]

Mr. Speaker, the member spoke about what corporations the United States will move into Canada but he missed the point about the new pasta plant that was just announced in Regina, Saskatchewan. It will be the first one in western Canada. The plant is owned by a very successful person from Saskatchewan who wants to create jobs in Saskatchewan. This business will be able to buy its grains directly from the farmer. The farmers are very excited about this new freedom to sell directly to the pasta plant.

How does that square up with why we in western Canada cannot have the same privilege as those in eastern Canada, not having to ship our grain down here to be processed, as before with pasta and many of the other grains that come down here and then we needed to have it shipped back to buy it as consumers? Why are we not afforded the same luxuries as eastern Canada?

[François Pilon, NDP, Laval—Les Îles, QC]

Mr. Speaker, I want to thank the hon. member for her question.

We are not saying they are not entitled to the same rights as others. Since the beginning we have been asking the government to put it to a vote. It is very simple. The government is saying that the Wheat Board was created without anyone asking for opinions and that it will be dismantled without anyone asking for opinions. The government should not repeat past mistakes.

[Wayne Easter, Liberal, Malpeque, PE]

Mr. Speaker, spinning off the question from the minister, it is not as bad as the government member tries to make us believe. As I mentioned earlier, there is far greater processing capacity for malting barley per capita, which came into place in the last number of years, three times as many in Canada as in the United States, whose producers have the freedom to market wherever they want. Wheat milling capacity in western Canada has grown by 11.8% in the last decade, compared to 9% in the northern tiers in the United States. Therefore, is not as bad as the member makes us believe.

However, there is an important question here. The government is basically saying that producers should have the freedom to market when, where and how they want, which is what, I believe, the minister said it earlier.

Does the member not believe that if that is the policy that is approached, it would completely undermine the supply management system in this country?

[François Pilon, NDP, Laval—Les Îles, QC]

Mr. Speaker, I want to thank the hon. member for his question. We all know full well that with that type of market the Americans, who have the purchasing power, will come buy our grain and it is truly the Americans who will benefit, not our farmers here in Canada.