Evidence of meeting #42 for Agriculture and Agri-Food in the 39th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was wheat.
A recording is available from Parliament.
Liberal
Charles Hubbard Liberal Miramichi, NB
On a point of order, I don't think it's our position to challenge witnesses as to who wrote their documents.
Conservative
Ted Menzies Conservative Macleod, AB
I'm not challenging. It's just a comment.
Moving on, some of the comments you make are about the PROs, and most years.... I should preface this by putting on the record that I also am a farmer, but all of my farming career of 30 years was under the jurisdiction of the Canadian Wheat Board. Having lived through that—“lived” being the operative word—I think that I as well as Mr. Anderson have the common advantage of being able to pass a little judgment on what we actually received on our farms for our wheat and for our barley that went through the Canadian Wheat Board. Very seldom was it any higher than what the PROs were announced to be.
I have a couple of questions related to your comments. One is about the relevance of the whole argument about selling into Ontario. Very little wheat, I believe, comes off the prairies and ends up in Ontario. That would be one quick question needing just a simple answer.
In your comments, you say:
CWB's entire board of directors believes very strongly...that any criticism of the CWB should be based on fact....
I also agree that any support of the board should be based on fact. I like to think we've been very factual about the statements we've made.
I can't help but go back and wonder, when we see the kinds of letters that came to the board—in response to invitation, I'm sure—what a wonderful seller the Canadian Wheat Board was. I always like to go back to where I get the best deal too. I think that begs the question, how good a deal did they get? How poor a deal did Canadian farmers get?
I know we can't divulge those numbers. I want to share with you one question I asked of Stats Canada at committee this morning about sensitive factual numbers that Stats Canada uses in developing a trade strategy for Canadian companies. I asked, “What numbers, what sales figures do you get from the Canadian Wheat Board? Do you get actual, factual numbers to base all of your Stats Canada planning for the future on, for Canadian trade?” They said all they ever get is average numbers. That's pretty irrelevant to Stats Canada and pretty irrelevant to what we need as a value-added industry in this country.
My question to you, Mr. Arason, is this. At the time of your appointment the press was suggesting you were being paid more than your predecessor—a great job of negotiating, I guess. Can you share whether that is correct? And if so, and if you continue longer than you perhaps had thought you might to begin with, how is this compensation going to compare with Mr. Measner's?
President and Chief Executive Officer, Canadian Wheat Board
Ted, you raised a number of questions. I want to refer to a couple.
On the PROs, we go through a PRO analysis every month with the object of reflecting the market as well as we can at the time, taking into account sales, exchange rates, what the competition is doing, what world weather conditions are, etc. The PROs are actually designed to reflect the market as we see it at the time they're put out.
Yes, we sell a lot of wheat into Ontario. I can say that from what we see coming this year in the Ontario crop, sales will be even higher. We are a major supplier of mills in Ontario; that is a fact.
President and Chief Executive Officer, Canadian Wheat Board
I don't have the percentage, Ted, but I will say that—
Conservative
Ted Menzies Conservative Macleod, AB
It would not be 50% or anything like that, to influence the price?
President and Chief Executive Officer, Canadian Wheat Board
I would say it's at least that, because a lot of the Ontario wheat goes into the U.S., into the cookie market, the cake market. It's a different type of wheat.
In terms of hard red spring wheat, I would say we are the major supplier into Ontario. We meet with the millers every year to plan our programs.
In terms of the issue you raised at the end, my compensation, yes, there was a lot of speculation about my compensation versus what my predecessor had been receiving. Actually, when it happened I negotiated with the Privy Council Office on what I thought was a fair compensation for taking on this job on an interim basis.
I did not have actual numbers on what the previous CEO received. That somehow got into the press, but what was reflected there and is in our latest annual report was a base salary. It did not include any benefits or other payments. When you take all that into account, the amount I'm receiving is less than what the previous CEO received for the fiscal year 2005-06.
As for going forward, I have no idea. That hasn't been determined.
Conservative
Ted Menzies Conservative Macleod, AB
I would hope you would have a plan for going forward for the Canadian Wheat Board without its monopoly, because we're certainly seeing that as the likely outcome. We would hope that would be part of your mandate, to prepare the board for its future without the monopoly.
President and Chief Executive Officer, Canadian Wheat Board
Just to respond to that, the board of directors has done scenario planning, looking at various types of operations going forward.
We had a significant planning session at the beginning of February, and out of that, management has instructions from the board to explore a number of alternatives for barley, specifically with and without the single desk. And management will be reporting back to the board on those issues at its March meeting.
NDP
Alex Atamanenko NDP British Columbia Southern Interior, BC
Thanks very much for appearing, gentlemen.
I'd like to make the point that to my knowledge there are no voluntary wheat boards in the world that exist side by side with an open market. Maybe I could get a comment from each of you on that. In other words, either it exists or it doesn't exist.
Real Voice for Choice were in town, David. I think they still are. They claim that they represent all party lines, 70% of the producers, and they're strongly for the single desk. Could you comment on that, please? Do you agree that they represent 70% of the western Canadian farmers?
Conservative
David Anderson Conservative Cypress Hills—Grasslands, SK
I don't know who they represent. I know the names of some of the organizers. I have no idea how big their organization is. We have a number of organizations that are out there lobbying, and these folks are one of them.
NDP
Alex Atamanenko NDP British Columbia Southern Interior, BC
Okay.
David, do the farmers in your riding support your position of removing the single-desk advantage of the Wheat Board?
Conservative
David Anderson Conservative Cypress Hills—Grasslands, SK
If you know the issue, and if you were on the prairies you would understand this, farmers across the west are divided on the issue. I would say we have about 20% who don't want the thing to change at all; we have 20% or 25% who would like to see the board gone, and that was evidenced by the Manitoba plebiscite; and I would say you have the rest in the middle, who would like to see some choice, a voluntary Wheat Board.
And actually that's what's demonstrated. I have the chart here from the Wheat Board survey last year, if I can find it, and we can just lay it out for you, because they do talk about.... The biggest portion was close to 50%, I believe, who wanted to have a voluntary Wheat Board with choice. And on both ends of the spectrum you've got people who hold the other positions.
Alex Atamanenko NDP British Columbia Southern Interior, BC
Yes, I'm familiar with that material.
As a follow-up question, Larry Hill keeps getting re-elected as a director from your riding in your area, and he's a real proponent of single desk. How do you explain that? Does that mean that the majority of farmers believe in single desk in your riding?
Conservative
David Anderson Conservative Cypress Hills—Grasslands, SK
Well, I keep getting elected there too. Does that mean I'm popular, or what?
The reality is that for the most part, on the side that has wanted freedom and wanted choice, a lot of those people have said, “I'm not going to participate in these elections. I don't want to support this system. I'm not going to participate in the election.” So they choose not to, and I guess by default the other side often wins those elections.
NDP
Alex Atamanenko NDP British Columbia Southern Interior, BC
Thank you.
Mr. Arason, you talked about Algeria in your letter, and David then mentioned a good deal for Algeria and other figures that were hidden. Obviously he was countering what you had said about Algeria. Could you comment on that, please?
President and Chief Executive Officer, Canadian Wheat Board
What I would say, to reiterate, is that the prices are the prices. We have made prices available to the minister, and to be fair, those prices went just a week ago to the minister. We're awaiting his response to sit down and talk about it. So that offer is there.
I think there is a lot more that goes into relationships than just price. There is a long-standing commitment, an understanding of the market, technical support, quality assurance, the Canadian system. And this is more than just the Wheat Board. The Canadian system has a great reputation in the world for providing a quality product.
All those things help the customer in putting a quality product to their customers. And we have customers all around the world--I was just in China and Japan--who will tell you the same thing. The Canadian Wheat Board and the Canadian system are very good suppliers. Buyers get what they pay for, they pay well for that, they get what they want, and they don't have any surprises.
That's the reputation the system has built over the years, and it's one that has put money in farmers' pockets, and hopefully it will continue to do so, because it is a system approach. The Wheat Board does not own assets. We have to work with the industry and with the grain commission and with farmers to make sure that customers get what they want.
NDP
Alex Atamanenko NDP British Columbia Southern Interior, BC
I have a couple of minutes. I'm going to read the first paragraph of a letter from Ken Larsen, from Alberta. I'm not going to read everything, because I'd like to keep it as civil as possible.
I also know that we should learn from history. A lot of us are concerned about what's happening. We're concerned about what's going to happen in the future, and I wonder if we're learning from the past. So I'd just like your comments on this.
He states that Brian Mulroney removed oats from the Wheat Board in 1989, and that now this minister is resorting to all sorts of tactics to cover up the resulting disaster. He asks us to please let this farmer--that is, Mr. Larsen--explain how it worked for him:
At the Leslieville, Alberta Pool elevator, oat prices immediately dropped from the CWB's initial price of $140.90 per tonne in June of 1989--with a later final payment of around $45 per tonne from the CWB--to $67.02 on the new private market that September. By February of 1991, oats had dropped to a mere $51.34 a tonne. This is a disaster that played out across the prairies. It was almost seven years, after a radical decline in oat acreage and other international factors, before prices recovered to something like what the CWB had gotten for farmers. The background to this disaster is instructive for farmers contemplating their not-so-secret ballot on barley marketing.
I'll stop. I just would like to get a couple of comments from each of you, if you feel this is relevant to what's happening, if it's something in the past. In other words, should we be careful of where we're going?
Mr. Arason, please.
President and Chief Executive Officer, Canadian Wheat Board
Well, the oat market is an interesting case study, in that, yes, oats were removed from the Wheat Board. There are a lot of issues surrounding the oat market, including the fact that production declined in the U.S., there were tariffs in place that were removed, capacity increased in Canada in response to the market. I don't think I'm in a position to say one way or the other what happened when oats were removed.
Regarding Mr. Larsen's observations, I respect what he's saying. I was involved in the grain trade at the time. I was also involved with Can-Oat Milling later on and saw the evolution of that market. So I'm not sure I would make the same analogies for oats that I would make for other crops, because there were a lot of other factors at play at the time, including the removal of the single desk.
Conservative
David Anderson Conservative Cypress Hills—Grasslands, SK
My only reaction, I guess, is to say Mr. Larsen's a strong Canadian Wheat Board supporter; we know that. Last weekend there was a small meeting in Regina of people to try to organize their campaign to get their point out about the Wheat Board. I think there were about twenty people there, or whatever. David Orchard introduced the opposition leader at that. Part of the planning document they had, in talking about that meeting, talked about using writers such as Ken Larsen to try to get their message out. So I would assume this is part of that.
Conservative
The Chair Conservative James Bezan
Your time's up, Mr. Atamanenko. Thank you very much.
Mr. Steckle, five minutes on the second round.
Liberal
Paul Steckle Liberal Huron—Bruce, ON
Mr. Arason, in October of last year there was a minister's task force on marketing choice, as you know, and of course in response to the board, which identified that the profit back to western grain producers was between $530 million and $600 million. Would you subscribe to those numbers or would you take issue with those numbers?