Bill C-18 Committee on Nov. 2nd, 2011

[The Chair, Conservative, Blaine Calkins]

There are two minutes left for the New Democratic Party, if anybody has some questions.

Mr. Allen.

[Malcolm Allen, NDP, Welland, ON]

Thank you, Mr. Chair.

And thank you, Mr. Rousseau.

Mr. Bonnett, you've talked about lengthening the period of time to look at impacts of this and how we would roll it out. I understand that your expertise lies elsewhere, as an individual farmer. But overall, when one is laying out that timeframe....

And by the way, I agree with you on the timeframe. To remind folks, the working group to establish Bill C-18 was convened in July of 2011, with a mandate to be finished by mid-September 2011. So basically it was allowed two months to bring disparate viewpoints together, supposedly. One can argue that maybe the disparate viewpoints didn't get to that particular working group, for whatever reason. There are many reasons why that happened.

But one would have thought that if you wanted a working group to think about what we should do and how we go forward.... What sort of timeline do you see for that working group, going forward, to then think about another timeline as to what you should do if you were going to implement it? Are two months satisfactory to simply say, here is how we're going to affect tens of thousands of folks? I'm not judging, positively or negatively. We're talking about tens of thousands of farmers across the Prairies who will be affected by this, and within two months, the working document will come together and we will go forward.

What sort of timeline would you see in your mind, if you were allowed to set out a timeline, Mr. Bonnett?

[Ron Bonnett]

Actually, that's a very tough question, to spell out the time. One thing I can say is that some of these issues are very complex. If you get into some of the discussions around transportation and take a look at mechanisms to ensure that some of the issues around producer cars are addressed—and in this regard Churchill was mentioned, as well as access to elevators—it will take a little time to work through those key issues.

The working group identified a number of issues, but a lot of their recommendations were that a process be developed to deal with them. I think it would take some time to work through that process.

[The Chair, Conservative, Blaine Calkins]

Mr. Nielsen, the time has expired, but you indicated that you'd like to briefly respond.

[Jeff Nielsen]

This is just to comment on the working group this summer. There have been working groups in the past. In 2005 there was an extensive study done at that time.

This is in the transition phase. I have full confidence in the staff people we have in Winnipeg. They have the expertise and they have the farmers' support to develop the plan, moving forward.

[The Chair, Conservative, Blaine Calkins]

Okay, thank you.

Colleagues, the time for this section of the meeting has expired. The questions were equally shared between the first hour and the second hour.

I would like to thank Mr. Bonnett, Mr. Nielsen, and Mr. Vos for appearing here and answering the questions. I would also like to congratulate my colleagues on keeping their questions germane to the topic.

I'll suspend for a few minutes, and then we will hear from the Minister of Agriculture.

[The Chair, Conservative, Blaine Calkins]

Ladies and gentlemen, let us come to order.

We're resuming this meeting pursuant to the agenda of our legislative committee considering Bill C-18.

We now have before us, appearing as witnesses from the Department of Agriculture and Agri-Food, Mr. John Knubley and Mr. Greg Meredith. And, of course, we have the Minister of Agriculture and Agri-Food, the Honourable Gerry Ritz.

Mr. Ritz, we are much anticipating your presentation. The committee in its rules has allowed 10 minutes for opening remarks. Then we'll proceed to the rounds of questions.

You've indicated that you're going to be available for one hour and that your deputy and officials accompanying you would be available until the end of the meeting, slated to end at 10 p.m.

With that, Mr. Ritz, welcome to the committee. Please begin your remarks.

[Gerry Ritz, Conservative, Minister of Agriculture and Agri-Food]

Thank you, Mr. Chair.

Of course, I'm pleased to be able to participate in today's discussion. We've been following along on television and with some of the follow-up. There have been great discussions going on, which I welcome.

As you've heard me say time and again, our government wants to help farmers earn their living from the marketplace, not the mailbox. Simply put, in working with industry, we've been creating an environment where farmers can succeed. Our cattle, swine, canola, and pulse industries, to name a few, have been competing and succeeding on the world stage. Sadly, this has not been the case for our wheat and barley farmers in western Canada. The Canadian Wheat Board monopoly, born in a different time to meet different needs, has cast a chill on western Canada and the entire grain sector in today's reality.

The fact is, today's entrepreneurial farmers are proving over and over again that they can and will help drive our economy if they have control over their farms and their own bottom line. For the grain industry this means a choice of when they sell their crop, a choice to whom they sell their crop, and a choice in the price they sell their crop. Since day one, the Harper government has made it very clear that marketing freedom is a cornerstone of our election platforms and, like farmers who make agreements on a handshake, we shook hands with farmers of western Canada on May 2 when they sent us back to Ottawa with a strong mandate.

Not only does Parliament have the legal right to enact, amend, or repeal any piece of legislation, but our government also has the responsibility, which we take seriously, to deliver on our promises. Our government will never allow one group of farmers to suppress the rights of another group. Every farmer must have the right to choose what he or she does with their own crop, including the ability to pool their grain through a new, reinvigorated Canadian Wheat Board. With the Marketing Freedom for Grain Farmers Act, we are delivering.

Marketing freedom is what western Canadian grain farmers want and deserve. Regardless of how they voted in Mr. Oberg's expensive survey, every farmer in western Canada will have the choice to sell their grain as they choose. For farmers who wish to continue selling to the Canadian Wheat Board, they will have the freedom to do so. Let me be clear: Our government will provide the board with the necessary tools and opportunities to be successful.

Ultimately, however, it will be up to farmers to decide for themselves whether they will market through the board and whether that's best for their bottom line. Farmers who have long wished to sell their crop on the open market, but couldn't because of the very real fear of going to jail, will now have that freedom to choose. Not only will an open market give farmers the marketing freedom they want and deserve, but it will attract new investment, encourage innovation, and create jobs.

Yesterday, I was in Alberta where Rahr Malting announced a $6 million investment to more than triple its storage from 400,000 bushels to 1.2 million bushels of malt barley. That's great news, Mr. Chair. As you know, that will get more barley right off the combine into a market position. Farmers will have their cash, and their bottom line will be much better for it.

Only a couple of weeks ago, the Prime Minister and I were in Regina to celebrate the announcement of a new pasta plant that will buy local durum wheat from farmers in the area. This plant will create 60 local jobs and 150 construction jobs. Both farmers and Alliance Grain Traders are looking forward to the day without the single desk, so they can deal directly with no buy-back or heavy administration to get in their way. Rahr has also made it very clear that it would never have been able to make its investment in Alberta without the government's plan to remove the stranglehold of the monopoly.

The opportunity for further growth is evident with these announcements, and I know there will be more to come. After all, the promise of marketing freedom is already attracting investment and creating value-added jobs in western Canada. So why would we make farmers in the industry wait? As soon as the legislation receives royal assent, farmers and grain companies will be allowed to begin forward contracting for delivery after August 1, 2012. Farmers in the entire value chain need clarity and certainty as they begin to plant for their coming crop year. The sooner they have clarity and certainty, the better.

A temporary check-off will be established at the point of sale to support ongoing research and market development. We all know how valuable that is. The interim Canadian Wheat Board will be required to develop a business plan to capitalize itself and begin to operate as a private company. The interim board of directors will need to submit such a plan and the Wheat Board will need to become a private entity within five years. It could be a business corporation, a producer co-op, or a not-for-profit corporation. The business model will be for the board and farmers to decide.

As you can see, the government has provided an evolutionary approach, one that gives the Canadian Wheat Board every opportunity to succeed as a voluntary marketing alternative for producers in western Canada. This approach will give the entire value chain time to adjust to the open market, and in doing so it will increase stability for western Canadian farmers during this period of transition.

Our government is also taking unprecedented action to support the community and the Port of Churchill throughout this transition. The government will provide an economic incentive of up to $5 million per year during the five-year transition period to support shipment of grain, including other non-board crops like oilseeds and pulses, through the port.

Working with the port owner, Transport Canada will invest a further $4 million over the next three years to repair existing port assets and support the safe docking of vessels. Western Economic Diversification will also extend the deadlines of a project of theirs so that the port can make full use of that funding. These initiatives are above and beyond the $38 million our government has already committed to Churchill.

Evidenced by our comprehensive plan, this government is working with the entire value chain and taking every precaution to make sure the transition to an open market will be as smooth as possible.

This act is about more than just its clauses and subclauses. It's about giving western wheat and barley farmers the same rights and opportunities enjoyed by farmers of other commodities or in other parts of Canada. It's about giving western farmers the right to do what they want with the crop they paid to plant, spent months to grow, and worked tirelessly to harvest. Our government trusts farmers, regardless of where they live or what crop they grow, to make their marketing choices based on what is best for their own bottom line.

We want to put farmers back in the driver's seat so they can continue to help drive the Canadian economy. Exciting new opportunities lie ahead for farmers throughout western Canada. This legislation is an important step forward, and I hope the members of this committee will continue to give it their full support.

Thank you, Mr. Chair. I look forward to your questions.

[The Chair, Conservative, Blaine Calkins]

Thank you, Mr. Ritz.

We're going to proceed to a round of questions.

Mr. Martin.

[Pat Martin, NDP, Winnipeg Centre, MB]

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

Minister, you're about to embark on a sweeping change to the rural prairie farm economy and we haven't seen a business case for it. We haven't seen a cost-benefit analysis put forward by your government that shows, beyond reasonable doubt, that it will be better for prairie producers. All we hear about is your own personal views, which you have a right to, and anecdotal information from others.

When we challenge the lack of a plebiscite and the lack of a survey by the government, you say you conducted a survey last weekend. You say you went home and talked to all of the farmers on your road and every one of them agrees with you. That's not good enough if you're going to dismantle a successful $6-billion-a-year corporation that is successfully owned, operated, and run by prairie farmers. So that's our concern here, that you haven't presented a business case to Canadians and you haven't given Parliament adequate time to do its due diligence.

Whether you're pro-Wheat Board or anti-Wheat Board, you have to admit that the changes you're putting forward are radical and are going to change the way we've done business for the last 75 years. Surely, it warrants more than two four-hour meetings and one meeting tomorrow night for some amendments that will all be voted down as you ram this through.

I know I'm talking and not asking questions, but let me just ask you your view of some of the following statements. In August 2011, the president of the U.S. Wheat Associates said that elimination of the single desk could leave a void in farmer advocacy, market development, customer support, export promotion, and quality assurance. Another American voice, Robert Carlson, president of the North Dakota Farmers Union, said he was convinced that the board earned Canadian farmers big premiums compared to U.S. prices and that the end of the monopoly would further weaken farmers and give more control to the giant multinationals. He said this had been “consistently true”.

Americans seem to get it that the single desk monopoly has been an advantage to Canadian farmers. Your narrow, wilful blindness to this reality is going to cost the prairie economy a fortune. At a time of economic uncertainty and instability, it's reckless and irresponsible to throw this further uncertainty into the agriculture industry of the rural prairie economy.

I don't expect to change your mind. I don't expect to win this debate. We're witnessing the death rattle of the Canadian Wheat Board at your hands. That's your objective. And you have the right to do it, I suppose. You have the majority. But can you not at least acknowledge that you haven't given us the business case to justify what you're planning to do?

[The Chair, Conservative, Blaine Calkins]

Minister Ritz.

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

There are a number of points there, Mr. Chair.

First and foremost, the Wheat Board is not going anywhere. It will still be there. It will still be at the same address in Winnipeg, and it will still be handling western Canadian farmers' wheat, durum and barley—but now they're going to have to earn it. They're going to have to prove that there is a price premium, which none of us who have actually farmed in that area have ever been able to peg down.

I happened to hear former director Henry Vos saying that he'd actually looked at the numbers inside the board--and he didn't point to it, because he can't as a former director--but could never find that premium either. As for the farmers in the U.S. the member spoke about, I've actually chatted with farmers who farm both sides of the border. When your field goes across, it really doesn't matter that the 49th parallel is in the middle of your 160-acre field. Those farmers who farm both sides consistently say—and there were articles on this in The Western Producer a short time ago--they have never seen an instance where they didn't make more money on their U.S. product than their Canadian product.

There have been studies done to death. I was watching the proceedings here, and Mr. Anderson named a number of studies this evening that show there has been no cost benefit. The problem is, though--

[Pat Martin, NDP, Winnipeg Centre, MB]

We have an equal number of studies that we can present.

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

I get to answer; you got to question.

An equal number of studies have disproven the myth. What has happened is that as we've lost wheat, durum, and barley acres, the Wheat Board has become a price taker, not a price setter any more, in the global reality. They're now the third-largest trader of grain in Canada alone.

[Pat Martin, NDP, Winnipeg Centre, MB]

That's not bad. That's a pretty good-sized company.

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Viterra is the largest, and now we have independent terminals owned by farmers in western Canada. We have small players. We have pulse players like Alliance Grain Traders that want to start handling durum, because they're already exporting pulses into countries like Morocco that are also buying our durum, so it would be natural for them to handle that product and move it on through.

There are a lot of players ready to work with a voluntary wheat board to make sure they have economies of scale, to work forward. Certainly, farmers themselves, year in and year out, have done the cost-benefit analysis and have voted with their air seeders and their trucks at the end of the year. They've been hauling their malt barley to feed lots--

[Pat Martin, NDP, Winnipeg Centre, MB]

Why don't you just let them vote, period?

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

--so that they can get cash for it--

[Pat Martin, NDP, Winnipeg Centre, MB]

Why don't you give farmers more choice? Just let them vote.

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

--and move on in their business.

So farmers will have more choice--

[Pat Martin, NDP, Winnipeg Centre, MB]

You're out of time.

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Farmers will continue to do a great job in western Canada and build that quality.

[Pat Martin, NDP, Winnipeg Centre, MB]

The time is up.

[The Chair, Conservative, Blaine Calkins]

As Mr. Martin has adequately pointed out, the time for his line of questions has expired.

[Some hon. members]

Oh, oh!