Public Accounts Committee on Nov. 29th, 2012

[Randy Williamson]

Just so everyone understands the system, each year we issue a support price, in other words, a price that the Canadian Dairy Commission will buy dairy products within Canada, dairy products being butterfat and solids, non-fat, commonly referred to as skim milk, powder. In doing so, we do not set milk class prices within Canada. Those prices are set within provincial boards. Those provincial boards take our support price as an indication or a trigger. That is my understanding in terms of how they set their prices.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

Thank you very much.

You obviously are very aware of the trans-Pacific partnership and the role it plays in the free trade environment in Canada. You obviously are aware that Australia, New Zealand, and the United States in particular invited Canada to the table of the trans-Pacific partnership and that those three nations in particular are very anxious to dissolve supply management here in Canada. I think that's a fair statement to make given all the public discussion about this.

Let me be very specific. Have you given any advice to the Government of Canada, either to the Department of International Trade or to the Department of Agriculture, or any other department, about the potential consequences of the trans-Pacific partnership, including an elimination or an altering of the supply management system in Canada?

[Randy Williamson]

None whatsoever.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

Have you been asked to do so?

[Randy Williamson]

Not at all.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

You have not been asked to give any advice whatsoever?

[Randy Williamson]

None whatsoever.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

You have had no communications whatsoever with the Government of Canada on any aspects of the trans-Pacific partnership.

[Randy Williamson]

That's correct.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

Okay. Do I still have time?

[The Chair, NDP, David Christopherson]

You have a minute.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

What's the role of the commission within provincial management of farm systems? In terms of the number of producers, do you have no role to play whatsoever? If I could suggest, you provide an oversight on a national basis, but in terms of the number of quota holders, the amount of quota production, that's simply advice that you offer. Would that be correct?

[Randy Williamson]

I go back to what I said a moment ago.

We established what we call the MSQ, the milk supply quota requirements, to meet the needs of the Canadian market on a national basis. The provinces have quota allotments that they then take to their producers. We have no involvement in terms of the number of farms or where the quota is allocated within the provinces, none whatsoever.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

Thanks, Mr. Chair.

[The Chair, NDP, David Christopherson]

You're very welcome.

Now, it's over to Mr. Hayes. You have the floor, sir.

[Bryan Hayes, Conservative, Sault Ste. Marie, ON]

Thank you, Mr. Chair.

I was reading a quote from the Auditor General's report where he states that all the key elements of an effective governance framework are in place.

Mr. Williamson, you mentioned the audit committee in your discussion. I haven't heard that come up. I believe you stated that all three members of your board are on the audit committee. Could you elaborate on the other makeup of the audit committee and the role of the audit committee within your governance framework?

[Randy Williamson]

One of the key components of the service the CDC provides is an audit of the operations of the Canadian Dairy Commission. Because we have only a three-member board, all three of us sit on that board. We are assisted with support, if you like, from key managers in the organization in terms of their presentations and the information they provide.

We have a minimum of four audit meetings a year, generally six, and we review on a quarterly basis, at a minimum, the financial statements, the balance sheet, the activities of our commercial operations, and the issues around hedging in terms of the import and export of dairy products that we've become involved in. It's a very similar operation that would exist in an operating company of any sort.

[Bryan Hayes, Conservative, Sault Ste. Marie, ON]

This is an internal audit committee as opposed to an external audit committee.

[Randy Williamson]

Yes, external audit is provided to us by the OAG.

[Bryan Hayes, Conservative, Sault Ste. Marie, ON]

Is it on an annual basis?

[Randy Williamson]

It's on an annual basis.

[Bryan Hayes, Conservative, Sault Ste. Marie, ON]

Your mandate is pretty large in terms of supporting the interests of all dairy stakeholders: producers, processors, exporters, consumers, and governments.

Are there any concerns from those stakeholders that we should be aware of? What is the process for somebody to bring forward a concern? How is that handled? How are those concerns addressed? Is there a list of outstanding concerns that we should be aware of?

[Randy Williamson]

As with any large and relatively complex operation or industry, if you like, there are going to be issues that come up from time to time. I'm sure we're all well aware of the Canadian Restaurant and Foodservices Association and some issues they have. We are working with them to try to solve some of those issues and problems.

There are issues around supply of milk on demand. I've indicated that we have a domestic dairy innovation program. In addition to that, on August 1 this year we put in place, under the auspices of the Canadian Milk Supply Management Committee, CMSMC, a 1% growth allowance. That 1% growth allowance is a 1% increase in our milk supply quota, which is a very significant number. The purpose and the direction of that milk is for new products growth only. That's quite a recent development. We have agreement now from both of the milk pools, the western milk pool and the P5 in the east, in terms of support for that. That is in place as we speak. It will provide a solution for some of the issues, some minor, some major, in terms of access to milk that we've had over the last few years. It will provide a solution to that.

[Bryan Hayes, Conservative, Sault Ste. Marie, ON]

What has the CDC done to solve the issue of a lack of process to declare and manage conflict of interest?

[Randy Williamson]

As I said, we identify at the start of every meeting, in terms of a review of every agenda item, if we believe we have a conflict. If we have a conflict, we recuse ourselves. We have put that into our bylaws, so it's not just something that we've done on a casual basis. It's an important component of what we are required to do currently. As I said, we use our good judgment to ensure that we act in as neutral a capacity as we possibly can.