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

[Niki Ashton, NDP, Churchill, MB]

Thank you very much.

Thank you very much to the speakers today.

Somebody I know who is close to this topic said that what we're dealing with today is the biggest negative policy reversal in a century. As someone who's proud to come from western Canada—who grew up in a community close to Churchill, which depends very much on the work of the Wheat Board, and who grew up with people who live on the Bay line and depend on the rail line up to Churchill, who grew up next to people who run farms in the Carrot River Valley, and who works with people across the border in communities like Prince Albert and into Saskatchewan—I cannot believe that our region is being represented, or misrepresented, in such a manner.

I cannot believe that people from Churchill were unable to come to this committee, because they were given 24 hours' notice. These are people living in a remote community that stands to lose 200 jobs—and I'm not quite sure what's so funny about that—some 200 jobs from a community of about 1,000 people only, because they are about to be subject to this whole sham, in which their livelihood is being taken out from under their very feet. Their voices tonight cannot be heard.

I would like my first question to go perhaps to Mr. McCreary, who referenced the importance of Churchill. What does Churchill stand to lose, and what do farmers stand to lose if Churchill is no longer operational if the Wheat Board is gone?

[Ian McCreary]

Thank you. That's an important question.

The economics of Churchill, if you are a player like the Canadian Wheat Board or a commercial operator whose value base is based on the farm gate, is simply that of drawing a line from the farm gate to the customer and saying, “What's the most cost-effective way to move that grain? It doesn't matter whether I own the terminal or not. It doesn't matter about any other pieces. How do I get it from point A to point B?” Churchill's advantage for customers going east is roughly $22 or $23 from Thunder Bay to a transfer elevator on the St. Lawrence—at least that was the number when I was a marketing manager. The ocean freight differential at that time—that is, instead of the customer picking it up on the St. Lawrence and going to Churchill—varied by the season and by customer, of course, depending on whether they had ice-reinforced ships. But you were looking at a number anywhere in the order of $8, which would have been a very aggressive offer to have them move that extra distance by ocean. These numbers are rough, but to the prairie farmer they're looking at a $14-a-tonne loss when that particular transshipment doesn't move through Churchill.

Ultimately, the Canadian Wheat Board is the only major shipper. There have been some other players that have moved small volumes to Churchill, but it is because you need to have a large commercial program. Churchill, of course, has a limited season. Customers need grain year-round, so you have to have a large enough program to service the customer somewhere else during the time Churchill isn't available and still have the capacity to adjust that at the most cost-saving pace, until such time as you can use Churchill again.

That's why a single-desk operation makes a lot of money using Churchill and why, ultimately, it'll be tough to create the economic incentives otherwise. Frankly, it'll be largely a false economy to try to get some private player to reciprocate that, unless you have a really large commercial operator, predominantly St. Lawrence-based, that wants all of a sudden to use a port that they don't own. There's just a bunch of pieces that are really hard to put together.

To the credit of the entrepreneurs involved on that line—both the owners of the line and the port—they've made a lot of effort. They have been trying. Since I've left the industry, I know people who have been involved in that development process. They've made tons of efforts to try to create an opportunity, but they just can't capture the same value that you have when you have the transferability of the single desk program.

[Niki Ashton, NDP, Churchill, MB]

Thank you, Mr. McCreary.

My next point would be about how anti-democratic this entire process has been. It was very important to me to be part of an event in Winnipeg this past week where people from across the Prairies were able to come together and talk about how they wanted to be heard on the Wheat Board.

I have here a handout—which I can deliver to the clerk—that I thought was a ten percenter, but it's actually a piece of Government of Canada advertising. It says, “The Government of Canada is delivering on its promise to give marketing freedom to Western Canadian....”, etc.. There's an asterisk next to that remark, and in small letters it says, “Subject to parliamentary approval.” Parliament is an asterisk.

Who paid for this? It was the Government of Canada.

My question is, where are the voices of western farmers, Mr. Oberg?

[The Chair, Conservative, Blaine Calkins]

Ms. Ashton, your time has expired.

Mr. Oberg, please respond.

[Allen Oberg]

Thank you for your question.

I think that in many ways, given the process put before farmers, their voices have been stifled. This is a government that said it was going to hold consultations with farmers shortly after it was re-elected. None of that occurred.

The Canadian Wheat Board did talk with farmers. In seven meetings across the Prairies, we had attendance of over 2,100 farmers. I had a telephone town hall with farmers. There were 17,000 people on the line. Farmers are aware of the changes being made here. They obviously had the opportunity to express their views in the plebiscite, and they did so in large numbers—in record numbers.

That's the real mandate we have as a board and as an organization. That's why we're proceeding, using whatever resources we have, to make sure that the benefits of the single desk—some $500 million a year—are maintained.

That's where the farmers' voices are.

[The Chair, Conservative, Blaine Calkins]

Thank you, Mr. Oberg.

We'll go to Mr. Anderson.

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

Mr. Chair, I just want to make a little bit of clarification here. The mayor of Churchill was saying exactly the opposite of what Ms. Ashton said. He said, “I'm looking in a positive direction, hoping that we’ll be able to secure more grain and the port will diversify.... I think we can do that.”

I just want to point that out.

[The Chair, Conservative, Blaine Calkins]

Well, that's not a point of order, Mr. Anderson.

Ms. Ashton, your time has expired.

[Niki Ashton, NDP, Churchill, MB]

It would be great to hear from him in person.

[The Chair, Conservative, Blaine Calkins]

In this portion of the meeting, I've been very generous, Mr. Wells. We have a schedule that we have to maintain here. We've already gone almost two minutes over Ms. Ashton's time.

I'm going to suspend this meeting for a period of not less than 10 minutes, until we can move on to the next set of witnesses, .

Thank you.

[The Chair, Conservative, Blaine Calkins]

Thank you. Order, ladies and gentlemen.

I appreciate your indulgence in suspending this quite lengthy meeting. We're moving on to the next hour. I will provide for as much time in this hour as I did for the previous hour, keeping this consistent.

With us in this hour is Ron Bonnett, president of the Canadian Federation of Agriculture; and from the Canadian Wheat Board, Henry Vos, and Jeff Nielsen, former directors.

Gentlemen, we have presentations, and the normal procedure here for this committee is to allow 10-minute presentations.

I understand, Mr. Nielsen, and Mr. Vos, that one of you will be giving a 10-minute presentation on behalf of both of you. Is that correct?

[Henry Vos, Former Director, Canadian Wheat Board]

It will be five minutes by each.

[The Chair, Conservative, Blaine Calkins]

Five each is fine.

Mr. Bonnett, we have 10 minutes for you. Given the fact that you are first on the agenda, sir, I will give the floor to you for not more than 10 minutes.

[Ron Bonnett, President, Canadian Federation of Agriculture]

Thank you.

Thanks for the opportunity to attend and present to you tonight.

One of the first things I should be clear about up front is that I am not a grain farmer; I am a beef producer. But I'm also president of the Canadian Federation of Agriculture. In our organization, while we don't necessarily represent grain producers directly, a number of our members do. We have groups like Wild Rose Agricultural Producers, Keystone Agricultural Producers, and the Agricultural Producers Association of Saskatchewan, and there are a large number of grain farmers in the membership of those organizations. So when I'm speaking on behalf of those groups, I'm speaking about some of the key issues that we have heard from our members. And here I'm going to be talking about some of the issues that have been identified in the discussions that took place at our board as recently as last week.

One of the things I quickly learned about when I was elected president of the Canadian Federation of Agriculture is the passion on the Canadian Wheat Board issue. There are people who support the board and there are people who feel they should have open market. Each side is very passionate about its views on what is taking place.

I would echo a concern of some of the earlier presenters, though, about the fast pace with which the legislation is moving forward. I think there are a number of groups that could be called as witnesses, and I reference the Western grain producers, who know the specifics of the grain industry and who have some concerns. I think it would be good to engage these groups in the discussion as well.

One basic principle that the Canadian Federation of Agriculture has always supported is the right of farmers to choose the types of systems they want for themselves. Whether it be a marketing system or whether it be identifying research priorities, farmers have to be at the core of the decision-making process. I think this was recognized in prior legislation, when it talked about farmers having a voice in any changes that took place at the Wheat Board. I think it's a principle that should be recognized going forward. I think the proposed changes to the Wheat Board, including the removal of the elected directors, could create some concern in the farm community about having some direct control of the Wheat Board.

We have not taken a position in our organization with respect to single desk or open market. Our belief is that the farmers involved—and those would be the grain farmers in western Canada—should be the ones involved in that decision, and that the decision should be made based on having good information.

That being said, there were a number of key issues that were identified. The current legislation calls for the appointment of directors as opposed to their election. We feel that is an issue that goes against the principle of having farmers controlling the organizations they're involved in. There's mention as well in the legislation of about funding for the Western Grains Research Foundation, the Canadian International Grains Institute, and the Canadian Malt Barley Technical Centre, but there is little detail on how the collection of the planned fees will take place. There is also a sunset clause in there. I think that when you're talking about research and technology, you need to have something with a long-term vision and long-term view. I think that's something that should be addressed in the legislation going forward.

It was mentioned earlier that there are still concerns about car allocation and producer cars. Questions are raised about how these are going to be coordinated and whether smaller producers will have access to those cars.

One of the other issues that has come forward is the issue of security of payment for the grains that are sold. Currently, there is confidence in the Canadian Wheat Board payments coming through. There is currently in place a system of bonding for small elevators. However, I think that one of the things to bear in mind as you're moving forward with this legislation is the fact that Bill C-13, which had been introduced earlier, had talked about removing the bonding requirements. So if you're moving ahead, there's a whole issue around the security of payments for those producers who sell the grain.

On the marketing side, one of the other issues our members brought forward was how we position a Canadian brand for grains. The Canadian Wheat Board took the lead in branding Canadian product and created some high-value markets.

Elevator access is one of the other issues that came forward from the producers who are concerned about whether the new wheat board would be able to have access...or whether it would be necessary to have legislative tools to make sure that access was there.

As I mentioned at the start, CFA does not pretend to be expert on grain marketing, but what we do believe is that farmers should have the right to direct the organizations acting on their behalf. We have an ability to bring forward some of the concerns, and I have mentioned those concerns. We must ensure that producers are aware of impending change, which goes back to the comment about the fast pace at which things are going forward and the need to ensure that producers all across the country are engaged in this discussion.

I look forward to your questions.

[The Chair, Conservative, Blaine Calkins]

Thank you very much, Mr. Bonnett.

Mr. Nielsen, you will go first. Is that okay?

[Jeff Nielsen, Former Director, Canadian Wheat Board]

Thank you.

I'd like to thank the committee for allowing me to come to speak to you tonight.

Western Canadian grain and oilseed and pulse producers are some of the most innovative, progressive, and adaptive people I know. We've seen the continued growth and value added in our oilseeds, pulses, and other specialty crops. Now, finally, with the passage of the Marketing Freedom for Grain Farmers Act, I know we will see and explore the same opportunities in wheat and barley.

By finally being allowed this freedom, these producers will see a profitable future for their businesses and more prosperous rural communities. But a majority of the directors of the current Canadian Wheat Board want to derail the idea of moving forward and of allowing us to be progressive, innovative business operators in the production of our wheat and barley, just like canola and pulses.

I'd like to speak on a number of intertwining items. First is the total lack of listening to what all of farmers within the Canadian Wheat Board jurisdiction have been telling the Canadian Wheat Board for years. Second is how that lack of listening by a majority of this board has affected the relationship with our federal government. Third, because of this, and coupled with the lack of respect for their fellow directors, these single desk directors at the Canadian Wheat Board have grossly disenfranchised themselves from reality.

On the failure to listen to all western Canadian farmers, I'll quickly go back to 2007 when we had the barley plebiscite. The results came back in favour of allowing marketing choice. At that time Chairman Ken Ritter commented, “The results of the barley plebiscite announced today are not overly surprising. The CWB has been surveying farmers every year for the past 10 years and these results appear to be consistent with our annual findings.”

I had a chance as a director to go back and look at all of our surveys up until the survey published last June. Not once was there ever support for marketing barley under the single desk. Where was there any listening to barley farmers during all those years?

Our malting sector made it clear in 2007 that there would be no new builds or investment in the existing facilities until the single desk was gone. Yet I'm happy to say that will soon be changing. I was pleased to be in Alix, Alberta, yesterday to hear of Rahr Malting Canada's expansion plans and their commitment to build long-lasting partnerships with producers to ensure quality barley for Rahr and, therefore, quality malt products from Rahr to their customers.

The Canadian cattle feeders have recently said that growth and varietal development, along with clearer market signals in barley, will increase the usage and acres once the single desk is gone.

What's really next for barley? Could we see increased food fractionation for health benefits? How about a higher starch variety of barley for the biofuel industry?

I'm also happy to hear that durum producers are excited to hear about a new pasta plant in the west.

Thinking back to our producer surveys, we've seen growth in the number of younger farmers--we categorize them as under 45--who want more marketing freedom. The Wheat Board has to look at its future as well. Who will be producing grain in the future? It will be these people. We have to address the needs of these younger farmers.

We've seen farms getting bigger, with the majority of them supporting an open market. Statistics Canada figures show that there are roughly 20,000 commercial grain producers in western Canada. So why did we send out 66,000 ballots in a plebiscite when there are only 20,000 commercial producers in the west?

A good quote comes from Mr. Oberg himself. At the Senate agriculture committee in 2006, he said that if a plebiscite were held “it should be all inclusive. The Canadian Wheat Board Act presently defines voter eligibility as any producer capable of growing the six major grains....”

The question of a dual market has been asked for years in our Canadian Wheat Board surveys. The results have shown a strong majority wanting the Canadian Wheat Board to stay with a dual market.

Honestly, folks, farmers know what a dual market means. It means a voluntary Canadian Wheat Board. To suggest that we don't know what a dual market means, and not allowing the dual market question on this past summer's ballot, was insulting to all farmers.

In my three years, I've seen a constant standoff between the majority of the board and the Canadian government. We've seen the laker purchase; the spending of farmers' money on a non-verified, non-binding plebiscite; a series of so-called producer meetings where special interest groups, such as the Communist Party of Canada, were allowed to attend and spread their propaganda; and most recently, the legal challenge to Bill C-18, spending more of farmers' pool account moneys. I've seen it go as far as not allowing management to move forward, to start working--

[The Chair, Conservative, Blaine Calkins]

Mr. Nielsen, I apologize for interrupting. You've asked to split your time with Mr. Vos at five minutes. You're at five minutes now, so any time you use now I will have to take from Mr. Vos.

[Jeff Nielsen]

Okay.

In closing, I cannot tell my neighbours how to manage their farm businesses and what to do with their wheat and barley, and no one should feel they have the right to tell me what to do with my grain farm. Democracies don't work that way.

Thank you, sir.

[The Chair, Conservative, Blaine Calkins]

Thank you.

Mr. Vos.

[Henry Vos]

Thank you, Mr. Chairman.

First of all, I need to correct the record. I am a farmer from northern Alberta. I was a former Wheat Board director. Thank you. I represented the region that included all of the area north and west of Edmonton, including the British Columbia Peace Region.

I was elected five years ago on a platform of changing the Canadian Wheat Board to provide farmers more freedom and flexibility to manage their businesses. I fully understood the mandate of the organization and I tried to work within that mandate to bring about the change that farmers were asking for. I was elected to a second term last year on the same platform.

On October 26 I resigned from the board of directors. I was faced with actions that the board of directors had decided to take, which I couldn't agree with. I couldn't reconcile the principles that I stood for with the actions the organization was taking. The reasons were the suit against the government; the direct costs of the action and the indirect costs of the uncertainty the suit would cause the industry, including the uncertainty for our customers; and I also was very concerned about the actions the organization appeared to take against people who had different opinions.

I was sanctioned for a three-month period in early January for the opinions that I expressed in public. Jeff was suspended from the November board meeting for expressing his opinion. Those things concerned me. What I saw was a philosophy in the organization that was driven by ideology rather than good business acumen and, to me, that was not the right way to run a business that was marketing farmers' grain. Their opinion of it being "my way or the highway" was the last straw. That was unacceptable to me.

In my view, commercial farmers want their own democratic right to market their own grain. The bill you have in front of you is good for the country. It's good for the economy, and I believe it's good for farmers. It represents a good transition to a new entity.

A government act to control grain prices to help out the war effort, at the start of the Canadian Wheat Board as we now know it, has outlived its usefulness. Farmers have been controlled for long enough. The war has been over for 67 years.

In the past 30 years I've grown many different crops on my farm. I've grown canola, fescue, oats, flax, sunflower, and alfalfa. Only three of the crops that I've grown I would called controlled substances. One was hemp. I grew industrial hemp one year. I required a permit from Health Canada and a criminal record check. The other two controlled substances were wheat and barley.

Every farmer in Canada needs permission from the Canadian Wheat Board to sell their wheat and barley if it's for human consumption. Pardon me, I meant in western Canada. Let's be clear on that: it is in western Canada. I ask you the question, is there some strategic importance in this country to the wheat and barley crop that the government has to impose control of it? I say no.

Are the farmers so irrational, irresponsible, or ignorant that they can't market their own crop? I say no. The farmers want their own individual, democratic freedom to market their crop. Everyone in the industry is tired of the constant bickering, the exercise of control, and the vindictiveness. Most commercial farmers want to move on.

Give the industry certainty and the ability to work directly with farmers, and I think you're going to see an industry grow and blossom. You're going to see energy, excitement, and investment. This bill, I believe, represents a good transition to a new entity that farmers can work with by their own choice.

[The Chair, Conservative, Blaine Calkins]

Thank you, Mr. Vos. I think that was a good statement to end on. I'm sure if you have a few more comments to make, these will come out in the questioning. But I must follow the rules that I've been given by this committee—

[Henry Vos]

No, I was finished.

[The Chair, Conservative, Blaine Calkins]

—and move on to members' questions.

Right now we're moving to the NDP and Ms. Ashton for five minutes.

[Niki Ashton, NDP, Churchill, MB]

Thank you.

Mr. Vos and Mr. Nielsen, both of you made reference to democratic rights and the democratic piece that is so critical to all of us as Canadians, but I understand that you supported the government plebiscite on barley in 2007, obviously understanding that farmers' democratic autonomy was a good idea at that time. My question would be, what's changed? I put forward a motion in the House as part of our work as the official opposition, asking the government to put this issue to a vote, not to take one side or the other but first listen to farmers through a government-sanctioned plebiscite. They voted against that motion and have since sped up this entire process both in the House and at committee, ultimately preventing farmers from voting on the future of not just the CWB but, arguably, the industry.

My question is, what are your thoughts on the need to listen to farmers when it comes to the future of not only the CWB but also the agriculture industry on the Prairies?

[Henry Vos]

Thank you for the question.

The barley plebiscite that the government conducted in the past represented choice for farmers. It gave them three different options, including a voluntary one, and overwhelmingly they chose choice. In this last one, a lot of the farm community just shrugged their shoulders and said, this is a waste of time, it doesn't realistically represent what could happen in the farm community with a voluntary Wheat Board. Farmers just shrugged it off and said that it's irrelevant.