Madam Speaker, I rise to speak in support of Bill C-51, a bill to amend the Canada Grain Act. The bill has many positive measures that will contribute to the prosperity and competitive advantage of farmers and indeed all Canadians.
The aspects of the bill I intend to address are the amendments that will remove the obligation of government to establish maximum tariffs for services performed by primary transfer and terminal elevator operators.
For the benefit of members who are unfamiliar with the grain industry, a tariff is a charge assessed by an elevator company for services such as handling, cleaning of grain, storage and drying of grain. As the Canada Grain Act is now written, the Canadian Grain Commission is required to establish by regulation the maximum allowable tariff for each elevator service. If an elevator company wishes to change its tariff, it must give the commission 14 days of notice. If it wishes to offer a new service it cannot provide it until the commission has established a maximum tariff for the new service.
These laws date from an era when farmers had few marketing choices and farmer organizations were relatively weak. In the early decades of this century these provisions made sense because elevator companies were not always as scrupulous as they should have been. Farmers were vulnerable so these changes were brought in at an appropriate time for protection. I know all members of the House continue to support them.
In the grain industry of the nineties however this kind of government intervention, as I know the Reform Party would agree, provides no measurable benefit for producers as it places unnecessary obstacles in the path of grain companies.
These are not merely my opinions. They reflect the advice the commission received from the grain industry and producer groups during the 1992 grains and oilseeds regulatory review. As the minister said this morning 57 groups were consulted. In addition we received written responses. The government shares the perspective of those representative groups.
If the key participants want this change who are we to deny them? We will go along with it. We have concluded that regulating elevator tariff maximums is not in the best interest of the grain industry. We believe that removing maximums will encourage increased urgently needed capital investment by elevator companies. We are therefore confident the measures we are proposing today would result in a flexible, more competitive elevator industry.
What are the changes we are proposing? First, the obligation that the Canadian Grain Commission set maximum elevator tariffs will be eliminated. Elevator operators will be able to decide for themselves how much they will charge for their services. As well, while we will still require elevator companies to file their tariffs with the commission, the requirement to give 14 days notice of the change they wish to make in their tariffs will be removed. This will allow elevator companies the same freedom enjoyed by other businesses, other farm groups and
agri-groups, namely the freedom to adjust their prices quickly to respond to local market conditions.
We have discussed these notions with respect to the wheat board and other kinds of institutions in place for the Canadian grain farmers. This is the way to respond to those niche market needs. We have that in the particular bill. As well, operators will no longer be required to charge the same tariff at all of their elevators. This will allow them more flexibility in rate setting.
We will not be making these changes overnight. Again, on the advice of producers and acting with due prudence with the grain companies, we recognized the need for a transition period. For a two-year period, the Canadian Grain Commission will retain the power to set maximum tariffs by order, if situations arise where the tariff charged is excessive. Those checks and balances are there. Those protections are there for members of the House representing grain farmers in their areas who are concerned about drastic changes that may not have the policy outcomes we intend.
When the two-year transition period has concluded, the commission will still exercise its power to investigate complaints. It is hoped that problems which may arise after the two-year transition period has ended will be resolved through discussion and moral suasion. We want to bring the people back to the table again to discuss any concerns and glitches that may still be evident in the policy.
Nevertheless government will retain the power to intervene if intervention is required. The commission will continue to have the authority to reimpose maximum tariffs subject to the approval of the governor in council if circumstances so warrant.
Inevitably in a situation like this one the first question to be asked will be: How will the measure affect the producer? All of us in the House today engaging in this debate have those interests firsthand.
Protection of the interests of grain producers remains one of the most primary purposes of the act. The government has introduced numerous amendments to the act which will benefit producers. This particular amendment is no different.
How are producers protected in a deregulated tariff environment? First an important point I want to stress particularly for the members of the Reform Party, and I speak in terms of Manitoba. They have their own producer owned or controlled elevator companies to protect their own interests. I am referring to such companies as the United Grain Growers. Manitoba Pool Elevators with 18,000 members in that province own the elevators. The interests of elevator owners and the interests of farmers are one and the same. We are not going to have the kind of subjugations and conflicts of interest leading to taking advantage of producers bringing their products to the elevators if we have that kind of producer involvement at the elevator door.
It is the same for the Saskatchewan Wheat Pool and the Alberta Wheat Pool. We do not believe for one moment that farmers will allow-and I have full confidence they will not-their own companies to take advantage of them. Producer owned co-operatives are formidable players in the grain industry. At Thunder Bay, for example, 75 per cent of the terminal capacity is operated by producer owned or controlled companies.
As my hon. colleague from Saskatchewan had mentioned earlier, on the west coast producers own 54 per cent of that capacity, the majority holders. In the interests of their producer owners these companies will maintain downward pressure on tariffs, forcing privately owned companies to compete. Moreover most producers will have choices they did not have in 1912 when the Canada Grain Act was passed. If they did not like what one company was charging they would take their grain to another. Allowing opportunities is the secret to that competitive advantage and open market competition. Competition will keep the rates in line and in some cases, I am convinced, will reduce them.
If the grain producers' own companies in the competitive marketplace are not able to set fair prices, the Canadian Grain Commission is still there to investigate. The commission will be able to limit tariffs and will retain the right to set maximum tariffs by regulation. This right will only be exercised, however, in extreme situations.
Members can rest assured that even in a deregulated tariff environment the Canadian Grain Commission will have the legal tools to defend the interest of grain producers whether in Lisgar-Marquette, Provencher or Brandon-Souris, important Manitoba ridings with grain producers.
In conclusion, I encourage members to support the legislation and I thank those who support it. It offers significant opportunities for grain farmers to become more competitive. At the same time it retains appropriate means to protect the fair interests of grain producers should these interests be threatened.