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

[Carol Hughes, NDP, Algoma—Manitoulin—Kapuskasing, ON]

Mr. Speaker, my colleague is absolutely correct. As I indicated before, the bill is reckless and would profoundly affect the lives of farmers.

My colleague talked about economists. Richard Gray, a University of Saskatchewan agricultural economist, said that large grain companies like Viterra, Cargill and Bunge will benefit from having a huge new supply of sellers competing to unload their product.

This does nothing for the port of Churchill. If anything, the port of Churchill will not be protected by this. They already have different ports they can use to market their wares. It is the small communities that will suffer the impact of this. We only need to look at what happened in Australia.

To add insult to injury, the government is rushing this legislation through the House. It is shutting down debate in an unprecedented manner. The reason we have a process in the House is so that good, smart decisions prevail. It is a process designed to avoid rash decisions and to provide peace, order and good government for the people of Canada, which the Conservative government refuses to do.

[Ryan Cleary, NDP, St. John's South—Mount Pearl, NL]

Mr. Speaker, we live in uncertain financial times. The economies of individual countries of the European Union, countries like Greece, Italy, and Spain are over their heads in debt, and it is getting worse. No one knows where or when the global financial hardship will end. The economy of our largest trading partner, the United States, is still mired in debt. The U.S. has yet to get back on its feet following the 2007 recession. Worries that Europe's crisis could worsen and spread are spooking investors and consumers.

Here in Canada our economy has fared better than most, but there is an undercurrent of unease, an undercurrent of nervousness, an undercurrent of fear. How will our economy weather the impending storm? That is the outstanding question. There is no answer, not yet.

The Conservative Minister of Finance has acknowledged that Canada's economy faces obvious risks from financial troubles in the United States and in Europe. When David Cameron, the Prime Minister of Great Britain, spoke to this House in September, he said that the problems in the eurozone are now so big that they have begun to threaten the stability of the world economy.

Here we are today in these uncertain financial times and the Conservative government's answer to these uncertain financial times is to gut the federal public service, throw more people in jail, download expenses to the provincial governments, and kill the Canadian Wheat Board.

Now, I am not a prairie boy. I have never walked in fields of golden wheat. I do not know what it is like to live on flat land, land flat as far as the eye can see. I am a bay man. That is what we call it back home. I am a bay man from around the bay. I have lived all my life on rocky land that rolls to the sea.

There is a common thread between the Prairies and the extreme east of this country, Newfoundland and Labrador. That common thread is common sense. My colleague, the NDP MP for Winnipeg Centre has pointed out in this House on numerous occasions, and this is a point that has resonated with me and should resonate with all Canadians, that there has never been one shred of evidence that farmers will be better off without the Canadian Wheat Board.

How can the Conservative government, which bills itself as being such a great steward of the Canadian economy in these tough economic times that will only get tougher, be so reckless as to turn the prairie farm economy on its head without even doing a cost benefit analysis? How?

Allen Oberg, a farmer and chair of the Canadian Wheat Board's board of directors, said:

This government has no plan. It has done no analysis. It has not even consulted farmers. Its approach is based solely on a blind commitment to a sound-bite phrase, called “marketing freedom”. Yet, here we are, barrelling ahead on a timeline that will rip apart a 75-year-old marketing system in a matter of months, and hamper any potential successor organization. This government's reckless approach will throw Canada's grain industry into disarray. It will jeopardize the $5-billion export sector. It will shift money away from the pockets of Canadian farmers into the hands of American corporations.

How can the Conservatives justify not carrying out a cost benefit analysis? How can the Conservatives base their argument on the strength of a free market when prairie farmers freely voted to market wheat through the Canadian Wheat Board?

On September 12, a majority of farmers voted in a plebiscite to keep the Wheat Board. A total of just over 38,000 farmers submitted mail-in ballots during the plebiscite, for a participation rate of 56%. That 56% is on par with the turnout for the last three federal elections.

Some 62% of respondents voted in favour of retaining the single desk for wheat. How can the Conservatives ignore those results? Easily enough when they have a majority government. That majority government power is a breeding ground for arrogance, a growing arrogance that has the Conservatives thinking they know better than Canadian farmers. That is not the case. Not so; not a chance.

What fishing and farming have most in common at this particular moment in our history is that they are both under direct attack by the Conservative government. In the Prairies, the Conservatives are attacking the livelihood of farmers with their attempt to kill off the Canadian Wheat Board. On the west and east coasts, the fisheries are their target with ongoing moves to gut what is left of the federal Department of Fisheries and Oceans.

What the Conservative government should realize, and must realize, is that its buddies on Bay Street cannot feed Canadian families. That is a simple fact of life.

I do not get it. I do not understand why the Conservatives have it in for Canada's primary producers: fishermen and farmers. Why? Who will benefit? Who will be threatened?

At the same time that the federal Conservatives are attempting to kill off the Canadian Wheat Board, back home in my home province, the Progressive Conservative provincial government is moving toward the creation of a marketing board for fish.

The federal Conservatives are killing off the Wheat Board, which markets and brands Canadian wheat and barley around the world, at the same time that the provincial PCs in Newfoundland and Labrador are attempting to create a similar type fish board to market and brand our seafood around the world. That makes no sense. If anything, it shows that there should more study, more investigation, more review so that smart decisions can be made.

The federal Conservatives are killing the Wheat Board while the provincial PCs in Newfoundland and Labrador are birthing a fish board. Two governments, two different directions.

What do we know about the Canadian Wheat Board? We know the board sells grain to more than 70 countries around the world. The board returns all profits to farmers. That is between $4 billion and $7 billion a year. We know that the Wheat Board does not set grain prices. Prices are established by global supply and demand factors. However, the Canadian Wheat Board's size and market power are used to help maximize grain prices.

Therefore, it is logical to assume that in the absence of the Canadian Wheat Board prices will not be maximized, as was the case with the Australian wheat board whose monopoly was abolished in 2006. In three short years, Australia's 40,000 wheat farmers went from running their own grain marketing system, selling virtually all of Australia's wheat, 12% of world wheat production, worth about $5 billion, to being mere customers of Cargill, one of the world's largest agribusiness corporations, which is privately owned by a company in the United States.

Since 2006 the Australian wheat board's share of wheat sales has dropped from 100% to 23% nationally, with 25 companies in the market all looking to make money on the spread between purchase and sale price. Make no mistake, people are still making money off Australian wheat, but it is not so much the Australian farmer who is making the money as the new middleman, the big corporations.

I want to end my speech with this thought which struck me today after I read the Globe and Mail. I read this:

Stephen Harper's crime legislation that triggered--

[The Acting Speaker, Barry Devolin]

Order, please. I would just remind the hon. member that he may not use the name of other members in his speech and that he has about 20 seconds remaining in his time.

[Ryan Cleary, NDP, St. John's South—Mount Pearl, NL]

My apologies.

[The Prime Minister's] crime legislation that triggered last spring’s election could pass through the Commons this week as it makes it way to becoming the law of the land - and Canadians still don’t know how much it costs.

We do not know how much it costs. How does that make sense? We do not know the cost to the Canadian economy of eliminating the Canadian Wheat Board. That is not good enough.

[John Weston, Conservative, West Vancouver—Sunshine Coast—Sea to Sky Country, BC]

Mr. Speaker, I have a question for my hon. colleague across the way. My father won the world championship in alfalfa in 1958. He grew the grain in northern B.C., in Fort St. John, and went to Toronto to collect that award. If he were here today, he would ask why he could not be equal with farmers in Ontario who have the freedom to market wheat and alfalfa as they see fit and why he could not have the liberty to do the same?

My question is simple. Why does my friend across the way not like liberty and equality?

[Ryan Cleary, NDP, St. John's South—Mount Pearl, NL]

Mr. Speaker, I thank the hon. member across the way for the question and congratulate his father on that 1958 award.

What I know is this. My home province of Newfoundland and Labrador does not have a marketing arm. It has individual companies that try to market, brand and sell fish, and to date it has not worked. Its industry is but a shadow of its former self.

There was a complete review of the Newfoundland and Labrador fishery just carried out, a memorandum of understanding, and one of the principal findings of that MOU was that there should be a marketing arm established to brand and market Newfoundland and Labrador fish because it has not worked piecemeal.

It has not worked with individual processing companies selling and marketing their own products. It has not worked, so Newfoundland and Labrador is moving toward a marketing arm for its fish. If it works, if Newfoundland and Labrador fishermen are stronger as one, I would say to the hon. member across the way that the same would hold true for prairie farmers.

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

Mr. Speaker, my colleague brought up a very good point, which is whether this decision to do away with the single desk is based on any extensive study of the situation. I have not personally seen it. Yes, it is often brought up by members of the government that this is in the name of marketing freedom and I am sure there are some farmers who want the freedom to market their grain. They all have a few acquaintances who have spoken to them and said that they would like to market their grain independently. However, there is also a large number who, for whatever reason, have voted not to go that way and they are concerned that if the Canadian Wheat Board is no longer a monopoly, they will be worse off.

How does the government make the decision? Is it based on its friends saying that it is a good thing to have market freedom or is it based on a serious study that shows that overall, when this legislation is adopted, all farmers or at least the majority of farmers will be better off in this country?

[Ryan Cleary, NDP, St. John's South—Mount Pearl, NL]

Mr. Speaker, that is a very good question. From day one, since this legislation was introduced in the House of Commons, New Democrats have asked for a cost benefit analysis. Has a cost benefit analysis been carried out? The answer is no, it has not been carried out.

In the absence of a cost benefit analysis, in the absence of hard and fast numbers as to whether the Wheat Board fulfills its mandate and western farmers would be better off marketing and selling their wheat through a Canadian Wheat Board, this is pure speculation.

The fact is that in these uncertain financial times, with what is happening in the European Union and our partner to the south, the United States, the Conservatives are taking an incredible chance with the western economy by trying this experiment. In the absence of hard and fast numbers, and a solid cost benefit analysis, that is all this is: an experiment.

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

Mr. Speaker, I will be splitting my time with the member for Etobicoke—Lakeshore, the member who is also from St. Paul originally. We are proud to have him speak on the Canadian Wheat Board.

I would like to take a couple of minutes from my prepared text to respond to a couple of things that my hon. colleague before me talked about. In fact, there was a report done. It was one of about five that was brought up at the Wheat Board committee that said that western Canadian farmers would actually benefit by approximately $450 million to $628 million a year by gaining marketing freedom. That is not even taking the inefficiencies of the Canadian Wheat Board into account. That is not even talking about more jobs through value-added sectors. That is just talking about money that could potentially be in farmers' pockets. So just because the hon. colleagues across the way choose not to read the reports does not mean that they have not been done.

The other aspect I would like to point out is this is a very serious issue for western Canadian farmers. This is something that my producers in the Westlock—St. Paul region are counting on for August 2012. For hon. colleagues across the way to get up and ramble on about talking points that they use about government crime policy has nothing to do with jobs and money in the pockets of western Canadian farmers. I find that absolutely offensive.

In fact, I am not knowledgeable about a marketing fish board in Newfoundland, but if I were to vote on it in the House of Commons, I would definitely take the time to at least talk to some fishermen from Newfoundland.

I ask my hon. colleagues across the way, and there are going to be many western Canadian farmers here this week, to please take time and talk to them. Talk to them about what they see in opening up the Canadian Wheat Board and allowing farmers to have the option for marketing freedom while still keeping the Wheat Board in place for other farmers who want to use it.

I am honoured to speak to the bill. Our government's top priority is the economy in which the agriculture industry plays a vital role. We believe that all Canadians should be able to position their business to capture the marketing opportunities that are open to them. When passed, this legislation would provide western Canadian farmers with the same freedom and opportunities as other farmers in Canada already enjoy. That is the freedom to market their grain, based on what is the best for their business, to the buyer of their choice.

On October 18 the hon. Minister of Agriculture introduced legislation that aims to give farmers the right to choose how to market their wheat, durum and barley independently or through a voluntary Canadian wheat board. The marketing freedom for grain farmers act would give every farmer in western Canada the freedom to choose how to market their grain. Whether that is to a buyer who pays the full price on delivery, or through a pooled offer by the Canadian Wheat Board, our intention is to have this open marketing system in place for August 1, 2012.

However, as soon as the bill receives royal assent, it will allow farmers and grain companies to enter into forward contracts for the purchase or sale of wheat, barley, durum for the execution after August 1, 2012.

As we all know, nothing good ever comes easily. Change brings challenge, but it also brings a wealth of opportunity. Our government is working diligently with industry to make the road to an open market as smooth as possible, so farmers can capture as many of these opportunities as possible.

During our extensive consultations, industry has raised a number of valid issues around the transition process.

Over the summer a working group comprised of experts in the field met with a wide range of industry players. It heard a broad range of advice on how the grain marketing and transportation system could transition from the current CWB-run system to an open market that includes voluntary marketing pools and it released its report in September. The report does an excellent job of addressing the major transitional issues faced by the sector.

The group focused on a broad set of issues affecting the grain handling and transportation system including: access to elevators, rail and ports; access to producer cars and short lines; funding market development and research; price transparency; and tools for price discovery.

On the issue of access to port terminals, the working group examined this issue in some detail. It expects that grain companies will be actively competing for grain volume in an open market. Grain companies need volume and they have gone on record saying that they will offer access to get it.

Grain companies already offer handling services at ports to third parties that do not own elevators or port terminals, many of which are direct competitors.

There will be an adjustment, there is no doubt, but some producer groups are already showing they can compete and add value for farmers by forming alliances and synergies through the chain. For instance, some inland terminals are co-owners of the Alliance Grain Terminal in Vancouver, and others have relationships with line companies.

These commercial relationships provide a win-win situation. They benefit farm members. It is already happening and it will continue to happen under marketing freedom.

On the issue of rail access, our government knows that proper rail service remains absolutely vital to doing business.

That is why the working group recommended that the Minister of Transport, Infrastructure and Communities continue the implementation of the rail freight service review initiatives.

We recently announced the appointment of Jim Dinning to lead a facilitation process to enhance rail freight service. Mr. Dinning brings a depth of experience and expertise in building consensus among industry leaders and government.

I would add that the industry also welcomed this announcement. “We are pleased to see the action plan set in motion”, said David Nobbs, chair of Pulse Canada. Rick White, general manager of the Canadian Canola Growers Association said, “We are very pleased that the Government of Canada has taken steps to implement the first of four key recommendations, and we look forward to working with Mr. Dinning during the facilitation process”.

The facilitation process will bring together shippers, railways and other key players to develop a template for service agreements and a streamlined commercial dispute resolution process. This was one of the key aspects that our shippers asked for when the level of service review was first undertaken.

Once the facilitation process is complete, our government has committed to tabling legislative changes that will give shippers the ability to establish agreements with the railways, promoting more predictable and efficient services.

On the issue of producer cars, the right to producer cars is protected in the Canada Grain Act, and the Canadian Grain Commission allocates these cars to producers. This will not change under the marketing freedom act.

The Canadian Wheat Board monopoly has no bearing on access to producer cars and our government will continue to protect producers' interests.

Under the new rules, producers and short lines will be able to make commercial arrangements with grain companies or the voluntary Canadian wheat board to market their grain.

Short line railways are expecting some adjustments as they will have more options of marketing partners for the grain volumes they can attract from producers, but already we are seeing some exciting partnerships. In Saskatchewan, for instance, the province's 12th short line railway was announced just recently.

There is no question that producer cars and short line rail will continue to offer an alternative to those producers who wish to use them.

Marketing choice for western Canadian farmers is not just about keeping a promise to our base, a promise that we have been making for over 10 years to western Canadian farmers. It is about modernizing our grains and oilseeds industries as well as our rail sector, and helping farmers continue to drive our economy.

I come from a part of rural Alberta that has been blessed with some of the hardest working, most entrepreneurial people in all of North America, if not the world. The people of Alberta, but in particular Westlock—St. Paul, despise handouts. In fact, most of the time they just want the government to stay out of their way.

My Grandfather Storseth was a perfect example. He left Norway and was willing to work hard and take some risks to get ahead in Canada. He was a farmer who broke his land with his own hands. He also trapped to help provide a living for his friends and neighbours. It is interesting, even back in the 1950s farmers had to work off-farm to earn a living.

When World War II started, he enlisted, and when his time overseas was finished, he came home to his farm in Fort Assiniboine. He never expected the government to give him a handout, but he did expect the government not to regulate him out of existence, not to tell him to whom he could and could not sell his products.

This is not a unique story. It is the story of many rural Albertans. As I said, we are a hard-working people who know that agriculture has always been the backbone of our economy. When the oil and gas booms come, the agriculture sector is the steady hand that continues to feed our province.

The changes that the Minister of Agriculture and Agri-Food and Minister for the Canadian Wheat Board is making in Bill C-18, the marketing freedom act, will help provide for that marketing freedom and will help provide a strong, stable economy.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, if the member were to listen to what the average prairie wheat farmer is saying, he or she is saying that farmers do want to keep the Wheat Board; they see the value. I have said this on a number of occasions. I am sure he could sympathize with the farmer who says that a majority of the wheat farmers want to retain the Wheat Board, yet the majority Conservative government is taking away the Wheat Board. The government's argument is that it wants to provide freedom and that the bill is all about freedom.

For the Wheat Board farmer who produces milk and sells wheat, does that freedom apply to both, equally?

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

Mr. Speaker, it would be interesting to note that my position on the questions he asked has not changed.

The opposition, particularly that member, continues to stand and say the Wheat Board is going to be eliminated. It is not. The Wheat Board will still be in place for western Canadian farmers. What they will also have is marketing freedom. When they put in their crops, when they hope for rain and hope that they do not get hailed out, and then do all the work before winter comes to get the grain in their bins, some of them want to get paid that year. They do not want to wait a full year for the Wheat Board to pay them. Some of them want to access open markets so they can get better money. Some of them want to use the board as a risk management tool. This will all be available to western Canadian farmers.

It is not helpful for members of the opposition, for their own political purposes, to try to create fear in western Canada by saying that the board will be eliminated when, in fact, that is not true.

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

Mr. Speaker, there has been misrepresentation of the facts. It was said that the minister had asked Canadian Wheat Board chair Allen Oberg to put the interests of farmers first, ahead of their own, long before it went ahead to work against the minister.

Would the member speak to the outreach efforts that the minister had made to ensure the Wheat Board was in fact invited and supposed to be part of the solution?

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

Mr. Speaker, the hon. minister is absolutely correct. The Minister of Agriculture and Agri-Food has done several outreaches, and our government has done many outreaches, to ensure that we had a smooth transition process moving forward.

I am very upset. The fact is that this could have happened a lot more smoothly, a lot more cohesively if, after we announced after May 2 that we would be moving forward with this, Mr. Oberg and the Canadian Wheat Board had helped facilitate the process rather than trying to burn the house down before they were out of it.

In fact, our government will continue to move forward with marketing freedom for western Canadian farmers because it is the right thing to do for western Canadian farmers and for our economy.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Mr. Speaker, the answer I got to my earlier question to the Minister of State for Finance was quite interesting.

I asked him if there were any sources of support, other than his friends, that would argue for this bill. He replied that the studies were his own personal experience. Once again, I would ask him if there really have been studies that have determined that it would be profitable for all farmers. If there are, and I strongly doubt it, I would like the hon. member to tell us about them, to prove that this bill and this change in our society will be profitable for all Canadians and all western farmers.

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

Mr. Speaker, as I stated in my speech, the 2008 Informa report clearly outlines the benefits to western Canadian farmers. In the Wheat Board committee, the working group took a look at about four other reports and tabled them. This is available if the member is truly interested in the benefits to western Canadian farmers. The Informa report said about $450 million to $628 million a year would be put directly into Canadian farmers' pockets. That is a tremendous amount of money for our farmers.

It is important to note that western Canadian farmers are asking to have both options, and that is what we are giving them. We are giving them the Canadian Wheat Board, the interim board that would be there, but we are also giving them marketing freedom. I fail to see how the member sees a downside to that.

Other than some little, hand-drawn chart that the member for Winnipeg Centre held up, the opposition has not shown us any proof that this would be detrimental to the western Canadian economy.