Agriculture Committee on March 1st, 2007

[Wayne Easter, Liberal, Malpeque, PE]

In any event, I'm not worried about it.

They have access to that information, and I think it's terrible when the minister does not avail himself of that information to deal with the substantive facts. Maybe that's one of the reasons why he hasn't answered the questions in the House.

The information that is being put out by you on your blog, Mr. Anderson, and through some of the householders of some of your colleagues, which I expect comes from you because it seems to be you who's driving the wedge against the Canadian Wheat Board.... Listening to the evidence from Mr. Arason here now, are you willing to clear the record and admit that information is wrong so we can have a substantive debate on the Wheat Board based on the facts, rather than the fiction you continue to propagate?

[The Chair, Conservative, James Bezan]

Mr. Easter, you're out of time.

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

I hope I have a few minutes here, because I want to talk about the prices I do know; I can't talk about the prices I don't know.

For 15 years I've heard the Wheat Board say “We're selling your grain. We're doing a good job.” That's what prairie farmers are used to hearing. This is not a new message we're hearing today. That's fine. We accept that position. But I want to talk a little bit about some of the comparisons that have been done in western Canada on wheat we are actually selling. On February 14, for example, Canadian malt barley in Red Deer, Alberta, was priced at $150 a tonne.

[Wayne Easter, Liberal, Malpeque, PE]

Mr. Chair, if the parliamentary secretary--

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

Mr. Easter, let me finish.

[Wayne Easter, Liberal, Malpeque, PE]

Point of order. If the parliamentary secretary is going to answer, why doesn't he answer the question and not stray from the question? In fact, Mr. Arason's paper dealt with the spot prices. We've seen his information on his website. We know it's propaganda, and Mr. Arason is correct that information is--

[The Chair, Conservative, James Bezan]

Mr. Easter, let him answer the question. I think that's debate and not a point of order.

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

It was Mr. Easter who wanted me to come to the committee. I'm glad to be here, but I'd like to give the information so everyone has it.

[The Chair, Conservative, James Bezan]

Go ahead, Mr. Anderson.

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

Take a look. On February 14 in Red Deer, Canada, malt prices were $150 a tonne. Across the border in the U.S. at the golden triangle they were getting paid $205 a tonne. Our feed in Red Deer was $152 a tonne. Their feed in Montana was $174 a tonne. Those are comparable prices.

I also want to talk about a few other comparisons that a couple of people have done. Brian Otto lives in Warner, Alberta, so he has a chance to check prices on both sides of the border. He's been very careful in the work he's done. I would just like to read a couple of the examples he's given.

He talked about Richard Gray's study and said:

I don't know what sales figures Mr. Gray was using to substantiate his claim, but the premiums he talks about have not reached my farm. Barley prices freight-on-board in Shelby, Montana, in January of 2007 were $7.50 a hundredweight. This equates to $3.60 a bushel American or $4.25 a bushel Canadian net to the producer.

The malt price according to the Wheat Board's PRO is $205 a tonne, which, after deducting freight and handling, equates to $3.37 a bushel. If the Wheat Board sells for premium, why is my malt barley selling for 88¢ less in our system?

I think that's a fair question. He wants some freedom to market his own grain.

He's also done a comparison of some other wheats. He said:

I did a comparison between the price of spring wheat at 13.5 in the Canadian Wheat Board monopoly and spring wheat with a protein of 14 in the U.S., which are comparable. I used the October 19, 2006, Minneapolis December futures quote of $211 for my comparison.

The cash price at Shelby, Montana, on this date for 14% protein spring wheat was $4.75 per bushel in U.S. funds, which equates to $5.32 Canadian. I used the Canadian Wheat Board fixed price contract for October 19 for my comparison to get a cash price. The Wheat Board quoted hard red spring wheat fixed price off the Minneapolis future of $211.94 plus basis of $12.48 per tonne minus a $5 per tonne adjustment factor, which was $219.42 basis Vancouver.

When I elevator, I use subcontracts. It's deductions for freight, handling, and cleaning of $45 a tonne. My net price--

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

David, slow down.

[The Chair, Conservative, James Bezan]

Can you wrap it up so we can go on to the next round of questions?

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

Yes. I have only two more examples.

I'll go to the end:

The wheat is discounted $21.43 per tonne in the system compared to Shelby, Montana, on the same day.

He has another comparison, and maybe we can come back to it later.

[The Chair, Conservative, James Bezan]

We'll come back to that.

Mr. Bellavance, it's your time.

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

Thank you, Mr. Chair.

Thank you for your evidence, gentlemen.

Mr. Arason, you're becoming President and CEO of the Canadian Wheat Board at a time when we're in the eye of the hurricane. It has to be said that the Conservative Party of Canada — and the Canadian Alliance before that — had determined long ago what it wanted to do with the Canadian Wheat Board.

I'll remind you a little of the history. There was a motion by Mr. Harper, the current Prime Minister, in 2002, when he was a member of the Canadian Alliance. In their election platform, the Conservatives had already stated what they wanted to do with the Canadian Wheat Board. There was also the appointment of this task force to which they appointed opponents to the Canadian Wheat Board as it was. Then there was the Order in Council that prevented the Canadian Wheat Board from justifying its existence and ensuring its survival. There was also Bill C-300, by our former committee chair, and the dismissal of your predecessor, Mr. Measner.

Then you arrived. There was a plebiscite. It goes without saying that the first ballots were recalled because it didn't go the way they wanted, for barley only, not for wheat.

So you were chosen, Mr. Arason. There must be a reason for that. I imagine you're in favour of what the government wants to do with the Canadian Wheat Board. Exactly what is the mandate you were given when you were hired?

[Greg Arason]

Thank you, Mr. Bellavance.

The mandate I was given when I was first hired--and this was included in the appointment letter that appointed me for a 90-day period--was to focus on the marketing of producers' grain from western Canada and to refrain from participating in the public debate, either for or against the Canadian Wheat Board mandate.

My mandate is to run the business. I think that's the same mandate I had when I was first appointed by Mr. Goodale a number of years ago. I was hired as a CEO who had experience in the business, who understood the business. That's the mandate I have accepted, and that is what I have focused on. I have visited with customers. I have met with the grain industry. I have really focused on the business, and as I said in my opening remarks, I have not entered into the debate about the mandate of the board. I believe that's an issue that should be resolved by farmers, and ultimately by the government.

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

Things aren't going very well when you're President and CEO and the mandate is not to intervene. You seem to accept that, but other people are intervening. I'm thinking, in particular, of Standard & Poor's, which has downgraded the Canadian Wheat Board's credit rating from AAA to AA+.

What do you think of that situation? Do you get the impression you are doing a good job of defending the people you represent? If must also be recalled that the majority of board members want to keep the Canadian Wheat Board's single window.

[Greg Arason]

I'm certainly aware of the Standard & Poor's rating, which I believe reflects the uncertainty around the Wheat Board, because they're aware of the debate going on in western Canada. I do not believe that rating in any way reflects on our management of the business or our relationship with the financial community. I think it's just a reflection of the uncertainty, and as a matter of fact it has not had any significant damaging effect on our borrowings or on our relationship with the financial community.

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

In your view, does the government have a share of responsibility for this uncertainty? And has the uncertainty been created by what I stated earlier and what the government wants to do with the Canadian Wheat Board?

[Greg Arason]

Obviously the government has indicated that it is going to consult with producers. I think the clear direction the government has taken is understood.

Ultimately, that's a decision, as I said, that will be made by the government. I believe producers are having some say in that with respect to barley, and I understand the minister said that he would undertake the same process regarding wheat. It's not up to me to tell the government how to construct its policies.

I'll go back to my earlier comments: I'm there to run the business, and that's what I intend to do, with the mandate that we have or whatever mandate comes forward, assuming that I'm there, and that's probably fairly unlikely.

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

You're the boss and you feel that the building is being shaken.

Mr. Jean-Philippe Gervais, who is a professor at the department of agri-food economics of Laval University, says that ending the Canadian Wheat Board's single window in favour of a voluntary system would give rise to the following, and I quote:

[...] CWB much less strong and its death would be virtually certain in three or four years.

What do you think of that?

[Greg Arason]

There are varying academic reports regarding the future of the Wheat Board. I don't really think it's my place to comment on any academic viewpoints. As I said earlier, I'm going to stick to running the business. Whatever mandate that business has, whoever the CEO is at the time will have that obligation. There's a lot of speculation about what might happen to the Wheat Board under different scenarios, but until something happens, nobody will really know for sure.

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

Can I answer that?

Actually, the board can take a leadership role in this. It's clear that there are people on the prairies who want to deal with them. A number of independent terminals have expressed interest in dealing with the board. They have to deal with them now, but they want to deal with them if there's going to be a voluntary system. A ton of producer car loading facilities people have talked to me and have said they would like to continue to deal with the board. At least one terminal apparently wants to deal with the board in the future.

The board of directors at the Canadian Wheat Board could be presenting a vision for the future that would allow the board to be very successful in the future in a voluntary system. There are a number of different ways, directions, or faces that it could have.

[The Chair, Conservative, James Bezan]

Thank you, Mr. Bellavance.

Mr. Menzies, for seven minutes, please.

[Ted Menzies, Conservative, Macleod, AB]

Thank you, Mr. Chair.

Thank you, gentlemen, for your presentations here today.

Greg, I'll take the liberty of calling you by your first name. You and I go back a long way. We've had many wonderful discussions about the Canadian Wheat Board, and we need to thank you for taking on this role again. It's certainly a challenging one for you, I'm sure, and a reincarnation of a great job that you did before.

I would really like to know who wrote that speech for you. I know you're not going to tell me, but I can't help but believe that isn't exactly what you would have wanted to tell us. However, I realize you need to stay impartial, so we'll accept that.