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

[Niki Ashton, NDP, Churchill, MB]

Okay, but what about the need to listen to farmers with a government-sanctioned plebiscite, one that has the stamp of the Government of Canada? Why shouldn't we have the ability to hear from farmers as to what they think should be the future of not just the single desk but, generally, the agricultural industry?

[Henry Vos]

What you're talking about, though, is continuing on the road of government control of the wheat and barley industry through an act of Parliament. That's a question for the government of the country on the day, whether they feel this is a strategic position that they need to impose on the industry or whether farmers can individually exercise their own democratic right to choose how to market their own crop. I say farmers want to have their own individual right or choice to market their crop how they wish.

[Niki Ashton, NDP, Churchill, MB]

I hear what you're saying, Mr. Vos, but what I also know is that the plan in Bill C-18 is such that the government will continue to have extensive control over one part of the industry, certainly. And when Bill C-18 passes, the minister plans to appoint the five directors. So the instance of control is very much alive and well in Bill C-18 as a result of this government's direction.

Mr. Nielsen, on July 23 you were quoted in the National Post as saying, “I want to be part of creating that entity”, referring to a new entity, “as a director”, referring again to the organization replacing the Wheat Board. Do you think this kind of a statement puts you in a conflict of interest in indicating your desire to participate in the replacement of an organization that you had every responsibility to protect as a sitting board member?

[Jeff Nielsen]

Thank you for the question, but no, I don't take if from that view. I view it as about being allowed to work on what farmers have wanted. All along, all of the Canadian Wheat Board surveys have shown overwhelming support for a dual market system, allowing the Canadian Wheat Board in some form and without the single desk to still be a market player. Farmers are looking for more market players. We're getting inklings that there will be more market players coming into the western Canadian grain trade once Bill C-18 is passed.

We're looking at a short timeframe between January and July 31, so that the four government appointees will be.... It will still actually be the same act, but with four government appointees. After that, it will be an open market for all of us, and those four appointed directors are tasked with creating and finding a new entity that will survive. I believe we have the strength and the willpower in the office in Winnipeg to get that done.

My intent was that I'd like to be there at that table to see that happen for those farmers who believe in choice in western Canada.

[The Chair, Conservative, Blaine Calkins]

Thank you.

Ms. Ashton, your time has expired.

We have Mr. Merrifield.

[Rob Merrifield, Conservative, Yellowhead, AB]

Thank you for coming in.

I'm a farmer as well. I farmed all of my life before entering politics. My son has taken over the family farm, and I hope my grandkids take over the farm as well, so that it's going to be in the fifth and sixth generation. So agriculture means a lot to me.

I want to get right to the single desk premium. We've heard conflicting views on that in this committee. One study in 2008 said that we were subsidizing the single desk monopoly to the tune of $400 million to $600 million a year. We've heard testimony by Mr. Oberg in the last panel suggesting that about $400 million would be compromised if we got rid of the single desk.

Mr. Vos, I understand that you've done some work on that.

Then I'd like to get to sanctions. Here I want to remind you that you have immunity at this table.

Let's go first to the single desk, and then we'll go to the issues of sanctions.

[Henry Vos]

I went to the Wheat Board, as I have done in many organizations in my career, to contribute, to make a difference, and to try to move agriculture forward. I'd always heard about the single desk premiums. I was a little skeptical, because these should translate into profitability on the farm; the crop should be more profitable, or at least profitable in some years. I could never peg anything down on the farm. When I got to the Wheat Board, I looked at a lot of numbers. I was shown a lot of numbers and shown various studies.

I have to relate to you the following, from the February 11 or February 18 issue of The Western Producer, by Mr. Andrew Schmitz. Andrew Schmitz had just completed a barley study for the Canadian Wheat Board and presented it to the board of directors. It said $100 million for barley. A week or two weeks later, he was quoted in The Western Producer saying that the studies often favoured the position of the party paying for the study. I thought that was interesting and something to consider. This guy had just finished the study for the Canadian Wheat Board and said that the studies favoured the party paying for them. Look at who paid for the studies, first of all.

From the information that I saw directly, I could never put my finger on net farm returns. Sure, there was talk about premiums and sales price advantages, but when you subtracted the costs that were imposed on the system—costs imposed on farmers by the lack of flexibility in planning their businesses—I didn't see a net benefit. That's my honest opinion of what I saw there.

In 2007-08, under discretionary trading, the Wheat Board lost something like $220 million. It lost an additional $90 million on its risk management of PPO contracts. I don't know if you take that off the supposed premium in addition to the administration costs and so on. Add up the picture. To me, when I added it all up, I found that this industry, with this kind of debate going on over the top of it all the time, does not add value and it was time to move on.

[Rob Merrifield, Conservative, Yellowhead, AB]

Now, to sanctions.

You mentioned that you were sanctioned last January. I have a hard time understanding what you're talking about there. Are you trying to tell me that the board sanctioned you for giving your opinion as a free and democratically elected board member? What went on there?

[Henry Vos]

The board of directors has a code of conduct, and you probably have one here at Parliament as well. There is a set of things in that code of conduct, and there is a governance committee that judges the directors on the basis of any complaint that comes forward relating to our individual code of conduct. I was sanctioned for things that I had said during the election campaign. Sure, I was still a sitting director, but people took offence at the things I said, things that I had written to my constituents asking for their support. I was sanctioned for that. I wasn't allowed to participate in any Wheat Board industry events for three months.

[The Chair, Conservative, Blaine Calkins]

Thank you, Mr. Merrifield. I regret to inform you that your five minutes have expired.

Mr. Valeriote for five minutes, please.

[Frank Valeriote, Liberal, Guelph, ON]

Mr. Chair, thank you.

Mr. Vos, you were elected as a director. When you were elected as a director, what did you think your responsibilities were when you became a director of the board?

[Henry Vos]

A director's responsibilities are very clear. They are the duty of loyalty and duty of care for the corporation.

[Frank Valeriote, Liberal, Guelph, ON]

Right, they're about the well-being of the corporation.

[Henry Vos]

Yes, the well-being of the corporation.

[Frank Valeriote, Liberal, Guelph, ON]

All right. You felt that responsibility particularly as a farmer.

[Henry Vos]

At the end of the day, the well-being of the corporation is represented, in my view, by the support of farmers for the corporation and the value that brings to the corporation.

I saw the support of farmers for the corporation in the 60% range. To me, for a monopoly, that's not an acceptable number. If you're a monopoly and you only have 60% support among the farmers, that is a ridiculously low number. I would have liked to see support at 85%.

[Frank Valeriote, Liberal, Guelph, ON]

I'm not getting at that; I'm getting to your responsibilities as a director. You saw there was value in the legislation that directors be elected so that farmers would run a corporation by farmers for farmers. Did you see that value?

[Henry Vos]

Let me put it to you this way. I farmed for 30 years. I saw a significant number of things the Canadian Wheat Board did that--

[Frank Valeriote, Liberal, Guelph, ON]

I'm not talking about what the Wheat Board did, Mr. Vos.

[Henry Vos]

Let me finish. You're asking about what value I--

[Frank Valeriote, Liberal, Guelph, ON]

I'm asking you a specific question. Do you see value in farmers being elected to the board? Let me put it that way. Yes or no? I don't need a long answer. I only have a few minutes.

[Henry Vos]

I'll answer your question. I saw things the Wheat Board was doing that I felt were taking value away from farmers. I thought I could contribute value to the Wheat Board by bringing my opinions to the table and have them incorporated into the policies of the organization.

The organization was set up that way. It had a board of directors.

[Frank Valeriote, Liberal, Guelph, ON]

So you saw value in being an elected director and yet the new legislation provides that the directors will be appointed by the government.

Do you not think, if we're talking about the technical aspects of this bill, that even with the transition of the board to a voluntary board the directors should be elected instead of appointed?

[Henry Vos]

From what I've seen in the last four years, I am completely comfortable with what's in this bill for the transition phase. The reason for that is we have a group of ideological bullies running this organization.

[Frank Valeriote, Liberal, Guelph, ON]

That's all I need to hear from you, Mr. Vos. I was just looking for that answer.

Mr. Chair, I would like to ask Mr. Bonnett--