Good morning...or afternoon, I guess it is here.
I am very pleased to be invited here today, because the present government has indicated they want to make some meaningful changes to the Wheat Board, and for farmers.
My husband and I in partnership farm organically in southeast Saskatchewan. We have farmed for 39 years on his family farm, which was established in 1900, and I want to talk to you today about money.
I recently read that $85 billion of the Canada GDP depends upon an adequate supply of grains. If you have enough farmers, you can indeed fill the supply, but western farm children are overwhelmingly rejecting farming. There is no money in farming. Everyone knows that agriculture creates tremendous wealth, but in order to survive, farmers need to capture more of that wealth created by agriculture, instead of begging taxpayers.
Legislators can put more money into farmers' pockets by making immediate changes at the Canadian Wheat Board. Before I give you my three recommendations on how to improve net income for farmers, I want to give you a little bit of background.
Government created the Wheat Board, giving them two distinct duties. Most familiar is the regional marketing duty, which is often referred to in part II and part III—marketing—of the Wheat Board Act. In part III, the Wheat Board buys grain from farmers who offer it to them. Part III only applies to the designated area, which is the west. This presentation is not about marketing.
The second duty of the Canadian Wheat Board is national licensing, in part IV. Licensing equally applies to all of Canada, just as the Canada Elections Act applies equally to all of Canada. All grain moving both interprovincially and for export is subject to having a licence. There are no exceptions, as Boyd found out, and only the Wheat Board can issue a licence.
When part IV was added as an amendment in 1947, it appears from access to information documents that it was intended to be a national tariff or export taxing provision, with the taxes to be paid to the government and costs paid by the government.
Every exporter in every province is subject to a fee described in paragaph 46(d) of the act. It is based upon the existing differences between prices of wheat and wheat products inside and outside of Canada, and because of NAFTA the export tax is presently zero dollars. However, there is an almost unknown Canadian Wheat Board policy in play that has a different effect upon farmers in different provinces.
Jean-Pierre lives in Quebec, and markets feed barley into the U.S.A. He gets the necessary Wheat Board export permit and licence and trucks south. Jim, in Alberta, also wants to sell his barley and applies for an export licence. The Wheat Board denies him. The Wheat Board's policy is to deny all designated area applications, so that Jim cannot bypass the Wheat Board as Jean-Pierre does. With no buyer other than an eager Wheat Board, Jim can eat his load of grain or burn it. He ends up selling to the board, which is no escape from the Canadian Wheat Board's policy monopoly. Any grain sold to the Wheat Board becomes board grain. A refusal under the national part IV, which is the licensing part, assures the Wheat Board monopoly buying under part III.
I am always shocked that the Wheat Board bases their monopoly authority upon licensing denial. If the elected Wheat Board directors, stacked with westerners, got ornery and denied all export licences to Quebec and Ontario, the Wheat Board could sell western grain into eastern producers' established markets and all MPs would pay a little bit closer attention to national licensing and licensing denials.
The Wheat Board Act is not an act of prohibition. I should go back and say that even though part IV licences should be equally issued to all Canadians, they are not. The Wheat Board backroom boys, swearing by their policy authority, continue to deny licences just because we live in the west, and this is discrimination.
The Wheat Board is not an act of prohibition. In fact, the courts repeatedly say it is an act of trade and commerce. They also say farming is under the constitutional head of agriculture. This means that all grain companies and railroads, which are described in the act as “works for the general advantage” of Canada clearly fall under trade and commerce and do exactly as the board says. Farmers with producer-held grain are outside the Canadian Wheat Board trade and commerce jurisdiction but are still subject to the taxing provisions in part IV.
I have a hunch you didn't know the Wheat Board quietly issues export licences to different categories of applicants who have successfully negotiated with the board to bypass the monopoly.
This unadvertised internal policy allows the following groups—that we know of—to bypass the board's marketing and pooling: one, all wheat or barley grown outside the designated area; two, pedigreed seed wheat and barley grown in the designated area; three, the specialty wheat varieties commonly known as spelt, kamut, and einkorn grown in the designated area; four, processed wheat and barley grown in the designated area and used for feed purposes under the Export Manufactured Feed Agreement, amounting to millions of bushels; five, wheat and barley grown in the Creston-Wynndel region, which were granted licences prior to 1998, when that region was still included in the designated area; and six, Ethiopian barley.
My husband and I are privileged that the Wheat Board issues export licences to us for our Ethiopian barley so we can personally bypass Wheat Board marketing and pooling. We just sold another load this fall without doing the buy-back, and received over $8 a bushel. We have another unregistered variety of barley, but the Wheat Board won't issue an export licence for that one.
Under the watch of the last government, western farmers were charged for not having export permits and were put in jail. These farmers lived in the designated area where export licences were automatically denied. Licence denial is the policy tool the Wheat Board uses to create its monopoly in western Canada.
These are my recommendations:
First, the Governor in Council can and must order the Wheat Board to issue export permits to western farmers, just as it does for eastern farmers. The Wheat Board will continue to buy and pool the grain for those farmers who choose the board as their marketing agent, just as it does now. Because the act does not have to be changed, the relief from the monopoly can be immediate for those who want to bypass the board, just as it is for us. This relief has been provided for many other applicants in the six categories I just named. All of them bypassed the board because they wanted to, and all were able to because the Wheat Board has willingly revised its policy to accommodate each category. Those asking for a western plebiscite on who gets national export licences are about as credible as men asking for a plebiscite in 1929 to decide whether or not women could have a ballot.
Second, the government must order the Wheat Board to obey its legislation and stop taking money out of the pooling accounts to pay for national licensing. Millions of dollars have been taken out of western pooling accounts for national licensing costs, even though they are supposed to be paid for by the federal government.
Third, the federal government can and must pay back the money taken out of the pooling accounts to pay all national licensing costs of part IV of the Canadian Wheat Board Act.
This is what westerners are paying for: the cost of issuing all provincial, interprovincial, and export licences; all administrative costs relating to the granting and denial of licences; all administrative costs of the big feed mills right across Canada under the Export Manufactured Feed Agreement; all compliance costs of licensing, including working with Canada customs and inspections; all Wheat Board costs relating to importing; and all costs of external and internal meetings and correspondence relating to part IV and other parts.
Recovered licensing costs, even for a ten-year period, will boost the pooling accounts. I realize that Ontario and Quebec are sitting pretty and don't pay either way, so we ask for your support to shift licensing costs from the west onto the federal government. The Wheat Board itself should have sent a licensing bill to the government, but it appears to have grown accustomed to playing fast and easy with the western pooling accounts. Under the watch of the previous Liberal government's Wheat Board minister, the Wheat Board took money out of the western pooling accounts to pay for $400-per-plate dinners for directors and staff to attend Liberal fundraisers.
With patriarchal governments and institutions, everybody sat idly by and watched the western accounts dwindle. But I'm looking forward to the marketing choice commitment the present government has made to western farmers. Governments who have the foresight to commit to trusting in their people will see the nation prosper.
Thank you.