Bill C-18 Committee on Nov. 1st, 2011

[Rob Merrifield, Conservative, Yellowhead, AB]

Getting back to the rail service review, there's nothing stopping producers and those who want to use producer cars. In fact, we encourage them to have service agreements and not to wait for legislation. Legislation just says that there will be a process in place to make sure that it will happen in the long run. But the issue is with the Wheat Board. That's the issue we're dealing with here tonight in this piece of legislation.

I imagine you are as frustrated as I am, if you have the best interests of farmers at heart. The Wheat Board has been pushing aggressively for a service agreement with the railway, because they are the largest mover of product in the country.

To be sitting back, not aggressively pursuing this in the best interests of farming, farmers, and moving product ahead, is somewhat frustrating to me. I want your comments on this. Do you see it the same way? Are these service agreements becoming a reality in the industry?

[Bob Friesen]

Yes, we think the service agreements definitely should be put in place. There should be compliance arrangements to make sure that the service improves to a level that farmers should be able to expect out of the agreements. We would encourage the minister to push that file as quickly as possible.

[The Chair, Conservative, Blaine Calkins]

Thank you, Mr. Friesen.

Mr. Merrifield, your time has expired.

Mr. Allen.

[Malcolm Allen, NDP, Welland, ON]

Thank you, Mr. Chair, and thank you, Mr. Friesen.

You talked earlier about the FNA trying to help farmers bring stuff together, looking at all kinds of avenues, pooling where they wanted to have them do that. We are looking at this idea going forward. The government's legislation says there'll be a dual-market system. That's in their reports, in their piece that says that's what they intend to have. It's a five-year span—there's some transition. At the end of five years, if it doesn't work out, tough. See you later.

You're doing what every good soccer player does. I know Canadians love hockey, so it's always the hockey analogy. But in soccer, it's about space and where the ball is going to go, similar to what you were saying about the puck. What could be incorporated into the legislation that would enable the entity they see as CWB 2? How would that be a player in your overall viewpoint? How would it work if there were pieces of the legislation that enabled them to do what I think you're trying to suggest? That is, for those who want to pool to go ahead and do it, and for those who want to be in the open market, off you go, go and do that. It seems as though this legislation is enabling the Canadian Wheat Board in whatever incarnation it's going to be. Under this legislation, it's more likely to fail than succeed, because of the way it's been set up.

[Bob Friesen]

On that one, we have looked more at commercial solutions. It would be premature for me to talk about those, because we're not prepared yet to talk about them. We have looked at them in the task force. We think there are ways of making sure that the new iteration of the Wheat Board can be successful.

But I mentioned earlier that I think one of the key components will be that there is a board that has a reason to want to make it successful. That will mean that the board will want to make sure there's a viable marketing agency for those farmers who want to use it—and there may be a lot of farmers. To me, for tonight the debate is quite simple. We have a lot of farmers who want to continue to use a marketing agency; we have farmers who want to market on their own. What we're saying is let's make sure that for those farmers who still want to do this we create something viable for them.

The FNA is prepared to be involved in that as much as possible, and we're prepared to help make sure that the new iteration of the Wheat Board, or whatever we want to call it—I don't know what we'd call it, but for simplicity's sake, CWB 2—is successful, so that farmers can use it.

We haven't seriously looked at how this could be done in legislation. We've mainly deliberated how it could be done commercially.

[Malcolm Allen, NDP, Welland, ON]

I appreciate your candour.

You pointed out, at least about the director part.... One of the questions I raised earlier with Mr. Knubley and Mr. Meredith was about the whole idea that the basic ministerial appointments of five directors, who are, for all intents and purposes, directors at the whim of the minister and the Governor in Council, and who will take direction from the minister and implement the directions whenever they're given—assuming that they are given, which I expect they would be, because there's a whole.... The legislation talks about all the pieces the minister will approve—the minister will approve this, the minister will approve that, and on and on it goes.

My sense is that this board of directors isn't functioning necessarily to the benefit of farmers who want to pool, but on the whim of a minister who decides which direction he wants to go in.

From your viewpoint—and I know you haven't looked at the legislation from the perspective of what you would do—do you see any merits to maintaining some process of election of directors for those who want to pool, rather than having absolutely the entire board appointed?

[Bob Friesen]

Is what you're suggesting that part of the board would be appointed and part of it would be elected?

[Malcolm Allen, NDP, Welland, ON]

Well, I'm allowing you to give suggestions here, Mr. Friesen. I'm not suggesting whether it should be or shouldn't be. At this point it is. Under the present format, a certain number of the board of directors are appointed for “technical expertise”; then there's another group elected by those folks who participate in the Wheat Board who pool, who have an election and have the ability to get a ballot—even though the government has decided who gets the ballot and who doesn't get the ballot, depending on how many years and how much you farm and all the rest of it.

I'm looking to you to know whether you have any thoughts around what you think that board composition should look like—not specific numbers, but whether it should have elected directors or whether it should simply all be appointed directors.

[The Chair, Conservative, Blaine Calkins]

Thank you, Mr. Allen. You've gone a little over your time. I've been very generous there.

Mr. Friesen, if you could, just answer this.

[Bob Friesen]

Thank you, Mr. Chair.

We haven't looked at election versus appointment in the organization, but what we have looked at is that the directors should be well versed in the grain handling, transportation, marketing industry. They should know what that's about. There should also be a component on the board of, say, expertise in equity investment, in raising capital, and there should be directors who have a passion to make this work on behalf of farmers. After all, it's supposed to be a marketing agency for farmers.

So it's more the criteria of the directors that we've talked about than whether they should be elected or appointed. But that's a suggestion I'm willing to take with me.

[The Chair, Conservative, Blaine Calkins]

Thank you, Mr. Friesen. We appreciate that.

Moving on, I have Mr. Storseth for five minutes, please.

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

Thank you very much, Mr. Chair.

At the beginning of my round, I didn't want to interrupt Mr. Martin, but I want to clarify a couple of things. It is disappointing that a mere 20 minutes before his tirade we actually had the committee table several studies that prove that marketing freedom works or will work for western Canadian farmers. This isn't something based on a whim.

To address Mr. Valeriote, who is knowledgeable about the George Morris Centre, we should, frankly, take a look at what they're actually saying, at their analysis, at the modelling they're doing, and not just say that they're a conservative think tank, so it doesn't matter and we're not going to take them into account. I'm not trying to put words into his mouth, but the point is that—

[Frank Valeriote, Liberal, Guelph, ON]

Mr. Chair, I didn't say that.

You're welcome to correct your language, if you'd like. I didn't say we should—

[The Chair, Conservative, Blaine Calkins]

Mr. Valeriote, thank you very much.

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

I just did that, but as you said earlier, Mr. Valeriote, when you imply something, it is the action that you're doing.

I would like to read into the record from page 3 of the George Morris Centre executive summary. It says:

The results of the producer surveys and literature review should be sufficient evidence to move to a voluntary system. The analysis of value added further backs this up, as we demonstrate that the grains-based value-added industry could, in the future, be worth between $1.4 billion and $2.87 billion, depending on the rate of growth. Additionally, employment in the industry....

As Mr. Martin so aptly pointed out, there is a global economic recession.

Additionally, employment in the industry would grow from 7,600 people to between 12,800 and 25,000, depending on total value added and labour productivity levels. Overall, the costs to producers and to the grains-based value-added industry outweigh any benefits of the CWB's monopoly.

I thought that was important to read into the record, Mr. Chair.

Mr. Friesen, it's good to see you here with the FNA. We've dealt before on input costs. It is good to see a small group of farmers looking for opportunities.

Basically, one of the things I have a question for you about is that we've had several private companies come forward who see opportunities, for example, for pooling. You mentioned that earlier in your presentation.

Would you like to expand on the opportunities you see here for pooling in regard to your company?

[Bob Friesen]

There would be those in the organization, Mr. Storseth, who wouldn't like your calling the FNA a company; we're a member-based organization. But I understand what you mean.

As far as pooling is concerned, if our organization were to do pooling, that would have to go along with some sort of government guarantees as well, which would be perfectly fine.

We see opportunities in pooling, in grain aggregation, in marketing and finding port positions for our members' grain, and all the things that farmers now rely on the Wheat Board for, and possibly even more. But we see those opportunities because we are a farmer member-based organization.

For those who would ask what is going to happen to the typical profits that are made in the industry, I would respond that an organization like FNA would accrue the margins back to those who would be working through the organization. So it has the empowerment aspect of a group of farmers working collectively, but it also has the benefit of accruing back whatever profits are made through that transaction and through the transportation and grain handling, et cetera. We see those opportunities.

You can start small and continue to multiply as you add more farmers, and of course that results in gaining more clout in the entire industry.

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

Obviously you would agree, would you, that all these opportunities you see would be accentuated through market certainty moving forward and having a clear path forward, with real timetables put in place? You would see market certainty as being an important aspect of these opportunities?

[Bob Friesen]

For anything to happen at FNA with regard to this, there has to be some sort of certainty. We could work within almost any environment, but a level of certainty absolutely helps the dynamics.

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

Thank you.

Do you see yourself as a competitor to the new Wheat Board, the new entity?

[Bob Friesen]

Sorry...?

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

Do you see yourselves as a viable competitor to the new entity moving forward?

[Bob Friesen]

I wouldn't see ourselves so much a competitor as a partner in a new entity.

[The Chair, Conservative, Blaine Calkins]

Mr. Storseth, I'm sorry, your time has expired and we've gone over.

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

It really seems like you give them more time than us, but that's okay.

[The Chair, Conservative, Blaine Calkins]

You're welcome to challenge the chair, Mr. Storseth.

Ms. Ashton, five minutes, please.