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

[Stephen Vandervalk, President, Grain Growers of Canada]

Yes, just like in any business, for me as a farmer, cashflow is number one on my farm. With the Wheat Board, cashflow is impossible. You get a price at the beginning of the year and you're not sure that's going stay. It could drop. It could go up. It could do whatever. You don't know how much you're going to be able to haul in. It could be 50%, could be 75%. And then once you do haul that in, you don't get paid for up to 18 months, when your bills are due in maybe three months.

I can give you a perfect example. My younger brother came back to the farm for the first time this year. He's got some land. He could not put wheat in. It's an absolute impossibility for him because he has bills due in November. He doesn't know when he'll be able to deliver his grain and how much he's going to get for it, and when he does that, his cheque won't come for up to 18 months from now. I don't know how anybody can run a business that way, especially a young farmer.

[John Knubley]

Gordon, did you want to add?

[Gordon Bacon]

I think that the committee looked at the issues related to the change in the marketing system, and we had two things we were taking a lot of time to think about. One was how Canada can be seen as a reliable supplier to customers around the world, and secondly, how we can maximize return to farmers. We had to look at how we can optimize efficiency through the entire system and make improvements along the way. I think what we've really talked about as a committee is a competitive, market-driven system that will ensure that we are serving both ends: farmers, by optimizing their returns from all crops and the movement of all crops, and to also be seen as a reliable supplier to customers around the world.

[Bob Zimmer, Conservative, Prince George—Peace River, BC]

Mr. MacKay.

[Murdoch MacKay]

It's interesting—there was one young farmer on the phone, and I remember this because he said, “Listen, you guys, whatever you're going to do, let's get on with it, because I've just finished harvesting my winter wheat crop. Now I want to make some plans for what to put in next year, and I want to forward-price this contract. Let's get this thing going so that today I know how to plan for next year, and not have to wait six to eight months to know what the initial price might be.” His view is that he can plan his life and have a better viewpoint six to eight months sooner, and be looking at things a year down the road. That's the one farmer that really struck it home with me about the future for him.

[Bob Zimmer, Conservative, Prince George—Peace River, BC]

Good to hear.

[The Chair, Conservative, Blaine Calkins]

Mr. Zimmer, your timing is impeccable—it has just expired.

Moving on, next on the speaker list is Mr. Rousseau, please.

[Jean Rousseau, NDP, Compton—Stanstead, QC]

Thank you very much.

My question mainly has to do with the new members of the Canadian Wheat Board who are going to be designated by the Minister of Agriculture. How can we make sure that sides won't be taken concerning the future of the Canadian Wheat Board, especially since the members will be the ones developing and submitting the plans to the Minister of Finance? They will be the ones approving the plans for borrowing procedures and the conduct of meetings. Ultimately, how can we make sure that sides won't be taken when all the members of the Canadian Wheat Board will be designated by the government?

[Greg Meredith]

Thank you for the question. I will answer it.

We anticipate that we will have very close ties with the new Canadian Wheat Board. We feel we won't have the same problems that we have right now with the directors of the Canadian Wheat Board. Over the next few years, I think the directors will focus on the success of the Canadian Wheat Board and they won't want to be in conflict with the government. We especially anticipate that there will be a very close co-operative relationship between the government and the Canadian Wheat Board.

[Jean Rousseau, NDP, Compton—Stanstead, QC]

I have another question for you. Do you have a transition plan for the directors who will be losing their jobs and for their team members?

[Greg Meredith]

No, there is no plan for the current directors of the Canadian Wheat Board.

[Jean Rousseau, NDP, Compton—Stanstead, QC]

Do I still have time for another question?

[The Chair, Conservative, Blaine Calkins]

You still have several minutes, Mr. Rousseau.

[Jean Rousseau, NDP, Compton—Stanstead, QC]

Okay, thank you very much.

Did you know that, when the Wheat Board in Australia was dismantled, the repercussions were catastrophic? Given that, what makes you think that the same thing won't happen in the long run when the Canadian Wheat Board is dismantled?

[John Knubley]

Our working group has not looked at the problems that might arise the way they did in Australia. We have focused on the regulatory aspects.

When we discussed the issues of access to ports and inland terminals, we did consider various aspects of regulation that were possible. One aspect was the access measures that Australia had adopted for terminal owners to obtain accreditation to export wheat. We did look at that to see whether it would be a regulation that would be appropriate for Canada. In the end we decided that type of regulation would not be appropriate and it would be better to monitor any anti-competitive behaviour and let the market work in the first instance.

[Jean Rousseau, NDP, Compton—Stanstead, QC]

Yet the price per tonne went from $99 to $27 in Australia. That is a significant drop. How can we make sure that the same thing won't happen here in Canada?

[John Knubley]

Again, on the issue of Australia, in the working group we focused on the regulatory aspects. In terms of how it worked in Australia on the issues at play, what I can say as deputy minister is that I was at the Cairns Group meeting, and the Australian trade minister, Craig Emerson, was there participating in the meeting. It was at that point--andMinister Ritz has cited this occasion many times--that he indicated that the changes in Australia have been very positive and that Australian wheat now exports to 41 countries with multiple sellers, compared to 17 under the single desk of the Australian Wheat Board.

Again, as deputy minister I was at that press conference where the Australian minster spoke to the benefits of the changes that have happened in Australia.

[The Chair, Conservative, Blaine Calkins]

Thank you, Mr. Knubley.

Mr. Rousseau, your time has expired. Thank you very much.

We will move to Mr. Hoback for five minutes, please.

[Randy Hoback, Conservative, Prince Albert, SK]

Thank you, Chair.

Thank you all for being here today.

This question is looking forward and looking at the new entity that has been created, as well as the transition period. But before I go there, I'd like to know what cooperation or involvement the existing board had with the working group in taking advantage of the situation of signing up acres or actually going about and selling grain, as a new entity, into the new crop years, maybe two or three years out.

[John Knubley]

Could you pose that question again?

[Randy Hoback, Conservative, Prince Albert, SK]

I will try to rephrase it. The board had an opportunity this summer to go out and sell grain. Did they make you aware of any sales they had made as a new entity, into the upcoming years, that they would be trying to complete the sales?

We've had accredited exporters come to visit us here in Ottawa saying that they couldn't source grain from the board after March. I just can't see any reason why they wouldn't be able to source grain.

[John Knubley]

I think they were coming at it from other grain companies, in the sense that they wanted certainty and predictability in terms of the future regime. It wasn't something the working group looked at.

What we do know from talking to Ian White, the president of the Wheat Board, is that the desire to establish those contracts and commercial arrangements is there. What's needed is the clarity of the passage of the bill.

[Randy Hoback, Conservative, Prince Albert, SK]

Again, that's another reason for getting this bill done as quickly as possible.

As you were getting your information that you needed to do your work, would you say the cooperation from the existing board was helpful, open, and useful, or was it more hostile in nature?

[The Chair, Conservative, Blaine Calkins]

I recognize Mr. Valeriote on a point of order.

[Frank Valeriote, Liberal, Guelph, ON]

I have to object to the question.

The directors of the Canadian Wheat Board have a fiduciary duty to do everything they can within their power to keep that board alive in its current form. The kind of negativity that's being implied actually negates the obligations that the Wheat Board members have right now. I'd ask Mr. Hoback to reconsider or at least rephrase his question about whether they participated or not, and why they might not have.