Agriculture Committee on March 1st, 2007

[The Chair, Conservative, James Bezan]

Mr. Steckle, in fairness to Mr. Arason, he did state at the beginning that he's here to talk about his role at the Wheat Board, and he isn't going to be taking a position on the debate that's currently before farmers. I think we have to respect that.

[Paul Steckle, Liberal, Huron—Bruce, ON]

I think Mr. Arason is able to answer that question, either yes or no.

[The Chair, Conservative, James Bezan]

Mr. Arason, you don't have to answer that question. In fact, it's your call.

[Greg Arason]

I respect that, and I am going to.... I've consistently said this. This is a debate for farmers. What might happen down the road, under any system, is at this point hypothetical. I really, in all honesty, could not say with any assurance what might happen. That's not my role. My role is to manage the business. I'm going to stick to that.

The politics around the Wheat Board should be determined by farmers, in discussion with government.

[The Chair, Conservative, James Bezan]

Thank you, Mr. Steckle.

Mr. Miller, you're on for five.

[Larry Miller, Conservative, Bruce—Grey—Owen Sound, ON]

Thank you very much, Mr. Arason and Mr. Anderson, for coming today.

Mr. Arason, there are just a couple of comments I allude to. One is—I am not sure who asked you—the amount of western wheat that gets shipped into Ontario, and it's significant.

By the way, I'm an Ontario farmer, and I have sold wheat, although that was six or seven years ago, I believe. Ontario sells its wheat to the U.S. at a high cost. It almost appears that it's able to replace that wheat with cheaper wheat from the Canadian Wheat Board.

On your earlier comments, I read some of your media messages about Algerian wheat sales, and I assume that you'd have no problem releasing that sales data to us, or at least encouraging the minister to do so.

There's one other question that I'll throw in with this. I couldn't help but be intrigued a little bit when you were talking about your wages in relation to your predecessor's. I probably wouldn't have got into this except that usually when you bring somebody in on a contract position, for a short time, it's inflated for that, and this seems to be the reverse.

For the public record, I'd be interested in knowing what exactly was Mr. Measner's salary. I don't know whether there were any perks with this job. Did he have a car? Did he have any memberships in fitness clubs, golf clubs, that kind of thing? I would also like to know if there was a severance package as well and what that dollar amount was.

[Greg Arason]

With respect, I don't think it's appropriate for me to say anything more than what is published in our annual report, which was that the salary for the fiscal year 2005-06 was $286,000. Within the Wheat Board, salaries plus benefits amount to about 1.3 times salary, so you could do that calculation.

When I was there previously, I did have a membership and a car allowance, so those things get added in. That's part of the package. That's what I'm saying.

In relation to what was quoted for me, which was about $31,000 a month, I think, with some benefits attached, his salary would have been higher at that time, for that period, than I'm receiving now. Whether I negotiated badly or not, I guess that's my problem, but I did that in good faith with PCO because we had to make a quick decision when I was about to get appointed.

Could I just comment on the sales data? I do want to put this on the record.

[Larry Miller, Conservative, Bruce—Grey—Owen Sound, ON]

I do too, but just before you leave this, sir, I thought it was interesting to note that Mr. Measner's salary was more than the Prime Minister makes. You did touch on the clubs, but you didn't really say what type of clubs would go along with that job.

[Greg Arason]

A golf membership.

[Larry Miller, Conservative, Bruce—Grey—Owen Sound, ON]

Okay, a golf membership.

[Greg Arason]

I had the same thing.

[Larry Miller, Conservative, Bruce—Grey—Owen Sound, ON]

You're not going to touch the severance package?

[Greg Arason]

No. I believe the whole issue of severance has yet to be dealt with, and I don't want to get into that.

In regard to sales data, unfortunately I feel that I cannot disclose the details, because it's sensitive customer information. I will say again that we've made that available or will make it available to the minister, because I think we have an obligation to do that if he requests it.

All I can say to assure you is that I think when the minister sees that, he will accept the fact that those values were fair in relation to the competition and in fact returned a premium to farmers.

[Larry Miller, Conservative, Bruce—Grey—Owen Sound, ON]

On the comment around the philosophy of freedom of choice, I'm a beef farmer. I've done some cash cropping, but my main business is beef. As a beef farmer, whether I sell beef or grow beef in Ontario, New Brunswick, Newfoundland, or Alberta, I sell it on the free market.

If I'm in the berry industry, or the turkey or chicken industry, I am under supply management from coast to coast. If I grow soybeans, I'm in the free market system, coast to coast, but when it comes to barley and wheat and a few other crops, I'm under the free system of selling, except in one part of Canada.

You mentioned that you were also from producer roots—at least I believe I heard you right. When you compare the way other agricultural industry products are marketed in this country in the different sectors, whatever sector they're in and way of selling, they're consistent from coast to coast, but in the case of these, they aren't. Would you consider that, as a producer, to be right or fair, or seem fair? Do you have an opinion?

[Greg Arason]

I was a producer only in that I grew up on a farm. And just for the record, my grandfather was part of the original Manitoba Pool Elevators and was a contract signer and committed his grain for five years to the pool in 1926. My father farmed that farm from that period up until he retired.

Really the issue of the Wheat Board in the designated area is that an act of Parliament defines the Wheat Board-designated area, and that has been in place for as long as I can recall. Therefore it's a decision of Parliament to define that area and how grain should be marketed within that area. Obviously it doesn't apply to other areas, but it is what it is because it's under an act of Parliament.

[Larry Miller, Conservative, Bruce—Grey—Owen Sound, ON]

And then it is Parliament's choice. Thank you.

[The Chair, Conservative, James Bezan]

Mr. Bellavance, five minutes please.

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

Thank you once again.

Mr. Anderson, you estimated the number of people who would like to keep the Canadian Wheat Board's single window at 20%.

I don't know where you got that figure, but I can tell you that we've been inundated with letters. We've seen Ipsos Reid polls, polls that are independent of the Canadian Wheat Board, as well as the results of the surveys by the Canadian Wheat Board itself. They show us something completely different.

In fact, what happened in Manitoba when the province decided to hold its own plebiscite on the question is equal to the best of the polls, in my view. We see that the vast majority of people want to keep the Canadian Wheat Board's single window.

In addition, a number of organizations representing thousands and thousands of farmers from across Canada are rising up against the present government's way of dealing with the commission.

This week, I like quoting Mr. Wilson, from the Western Producer. In the February 22 edition of that newspaper, he asked what I thought was a highly relevant question. He asked this:

“What happens to the Canadian Wheat Board if the monopoly is lost?”

The Canadian Federation of Agriculture, which is meeting in Ottawa this week said the following in a press release:

[...] no one has yet presented a viable plan for how the CWB can transition and remain strong [...]

Here we're talking about the eventuality of the single window being abolished.

There's also the Union des producteurs agricoles du Québec. I know that knowing that Quebec is concerned about this issue bothers some of my colleagues and even certain journalists in English Canada. I nevertheless think that they've outlined to you often enough the reasons why they're concerned with this.

There are two major collective marketing tools in Canada: the Canadian Wheat Board and supply management. The people from the Union des producteurs agricoles du Québec met with us, Mr. Duceppe, other members and myself, to tell us about developments on this issue.

In a news release, the Union des producteurs agricoles said this:

[...] the voluntary marketing agencies — that's what the present federal government wants to introduce in place of the CWB — invariably wind up failing, since producers lose the dominant strength that enabled them to enjoy better selling conditions in the market.

That's a news release that I can send you, Ted, if you want. Mr. Menzies does not agree with the remarks of the Union des producteurs agricoles du Québec.

Mr. Anderson, I'd like to know whether you think all these factors are rubbish or whether they have some basis. Your government has a duty to explain what will happen if the Canadian Wheat Board ever became a single window.

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

I'm not sure I got all of that clearly translated, but in our part of the world we don't believe that having freedom to do your own business means you will always fail, and if people aren't forced into pools they're always going to fail. In our part of the world, most people believe they can make their own decisions. We have people at both ends of the spectrum who are farming anywhere from a few acres up to 50,000 acres who feel they are competent to make their own business decisions. That's one of the aspects that comes into this.

As you can tell, there are lots of opinions across the country about this situation. Farmers in our part of the world would like the opportunities that farmers have in other parts of the country, and they would like freedom.

I will come back to the fact that the board of directors at the Canadian Wheat Board can and should be providing leadership in this, because clearly there is a mood and atmosphere for change in western Canada. It would be very simple for them to come up with a few changes to their situation that would provide for choice for farmers with virtually all the authority they have right now. I can think of some of those things. It's very simple. It's not complicated. There's a group there who does not want to move, they don't want to change, and because of that they have not come forward with any of these potential suggestions.

Some live in fear, but most farmers see the opportunity that's going to come from this. The people I'm talking to say this will give us more opportunities. Mr. Steckle had referred earlier to the supposed cost of opening things up. At committee, we heard that if we just changed the KVD system alone, we can probably save $200 million in western Canada. Studies show it could be nearly $1 billion of opportunity and a benefit to western Canada if we can give people the freedom to process and develop their own products. I'm excited about the opportunities, and most farmers are.

[The Chair, Conservative, James Bezan]

Thank you, Mr. Bellavance; your time has expired.

Mr. Gourde, please, for five minutes.

[Jacques Gourde, Conservative, Lotbinière—Chutes-de-la-Chaudière, QC]

Thank you, Mr. Chair.

My question is for David.

I don't know whether western producers feel bullied. In Quebec, the federation of grain producers gives grain producers a choice. They're free to market their grain as they wish, but they can also group together to market wheat for human consumption.

Could the Canadian Wheat Board show more flexibility toward those who produce specific grains, organic grains, for example, which are currently at a disadvantage because they aren't differentiated from other grains? Despite the specific properties of those grains, producers don't get the best market price.

We mustn't conceal the fact: grain varieties have evolved over the past 20 years, whether it's for making bread and cookies or in more specialized markets and niches. As a result of the way in which grain is currently marketed, these grains wind up in the elevators in the same way as grains of lesser value. That doesn't benefit producers. Could I have some information on that subject?

Thank you.

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

There are two things. One is that if we could open up the system in western Canada, we would have access to dozens more varieties of grain and dozens more opportunities to grow different products. I think that's why the committee recommended that the KVD system be set aside, so we do have those opportunities in western Canada that we have across the rest of the country. Ontario set that aside 17 years ago; their industry has bloomed because of that.

The second thing I have to say about that is organic producers in western Canada have been at a severe disadvantage because of our marketing system. Until this year, the Canadian Wheat Board has not marketed organic grain. The producers have gone out, they have made the sales, then they've had to make an arrangement through the Canadian Wheat Board to buy back their grain from the Wheat Board, and then make their sales. The Wheat Board takes a cut off the top for doing nothing.

This year, it's a big cut. A producer in my area said that over the last ten years that buy-back provision has probably cost him $1 million on his farm. He's growing organic grain, and they've been able to sell it, but every time he sells a bushel of grain a cut goes to the Canadian Wheat Board, and they have not been the ones who have been marketing the grain.

This year the Wheat Board decided they were going to start getting into marketing the grain, so they picked one of the organic certification outfits they liked to set up a pilot project. I had organic farmers tell me what happened then is they phoned the people who are buying from them, and these guys said the Wheat Board had phoned them and told them they were going to be selling grain this year, so they expected them to have to deal with that and be in competition with them. Farmers wouldn't mind being in competition with them, but they don't like having to pay them the buy-back as well as trying to compete with them.

Mr. Gourde makes a good point, but western Canadian farmers would love to have that opportunity. Organic would be a good place for the board of directors to make some exceptions; they can give no cost buy-backs and export permits. The organic industry is not so big in western Canada that it's going to threaten the Wheat Board at all. This is one area where they could really show some leadership, open things up a bit, and it would be an area where farmers would then begin to believe they are interested in working with them.

[The Chair, Conservative, James Bezan]

You have less than 30 seconds.

[Jacques Gourde, Conservative, Lotbinière—Chutes-de-la-Chaudière, QC]

Thank you very much.

Could Mr. Arason give me some details in response to my question?

[Greg Arason]

I would like to say something on KVD. We're certainly aware of the ongoing discussions around KVD. Our concern is that when KVD is replaced there has to be a system that will assure our customers they are getting what they want. The evolution away from KVD must occur in a manner that has support of all the participants in the industry. I think there is an industry effort under way to do that.

On the organic side, as has been noted, we have made some changes regarding organics. Ultimately it will be up to the board of directors to decide if those changes are heading us in the right direction and where they might go from there.