Mr. Speaker, I am pleased to speak at third reading of Bill C-51 which amends the Canada Grain Act.
The Canada Grain Act regulates grading and inspection of grain, maximum tariffs on handling charges including elevation, cleaning, drying and so on. The act also restricts in some cases transportation of grain. It is involved in licensing of businesses dealing in or handling grain and also in the security requirements of these companies.
The Canadian Grain Commission oversees the act. It is made up of appointed commissioners who seem, for some reason, to turn over to some extent after an election.
Today I will discuss the changes to the Canada Grain Act which are proposed in Bill C-51. I will discuss these changes under three headings: first, excessive power moved to the hands of the minister and to cabinet; second, maximum tariffs on handling charges; and third, bonding and licensing. As well as these three main areas I will speak briefly about a few other areas which I think are of particular interest.
I will begin with the excessive power moved to the hands of the minister and cabinet under the changes made in Bill C-51. In this bill an increased amount of legislative action is given to the governor in council which is the formalized constitutional body through which the federal cabinet exercises executive power. The executive instrument of the governor in council is known as an order in council which represents delegated legislative power as permitted under specific acts of Parliament.
This delegated legislative power gives cabinet, or really the minister, the ability to enact subordinate legislation by order in council or by regulation. Power delegated through enabling legislation is so common that the law is effectively formed by administrative bodies rather than by Parliament as it should be.
The legislator's role should be to pass the initial legislation authorizing certain agencies to devise, promulgate and supervise regulations as may be deemed necessary to give full effect to a particular act.
Too much power is continuing to be centralized in governor in council. In this bill, clauses 2, 4, 9, 15, 33 and 35 are examples.
How can the Liberals reconcile this with their red book promises of more open and more democratic government? Why are they formalizing control in cabinet? The argument that was presented when this question was raised is that the bill only legitimizes the authority that is there anyway.
If the government is serious about moving to a more open and less interventionist style of government, why did it not remove these powers rather than just formalizing what was there anyway?
This expansion of the scope and use of governor in council power which has occurred at the expense of the power of the legislature or Parliament is largely a result of the increasing complexity of modern government. However this delegated legislative power may involve matters of administrative routine right up to matters of major political and economic consequences. A wide range of issues are dealt with by the order in council power.
Such legislation is so extensive that Parliament can do little other than conduct random checks and investigate only some apparent abuses. The decisions made by cabinet or governor in council are based on informal procedures and the deliberations are secret. This amounts to little more than government by cabinet decree with no accountability.
In this bill there are an increasing number of areas for which the Canadian Grain Commission will now require governor in council approval. Conceivably the Liberal government under the revised act would be given the ability to covertly affect the interest of an individual farmer, a farm group or a grain dealer, for example, which is not operating according to its wishes. Dare I suggest this change opens the door to pay-offs for political favours or punishment for political foes. This is the type of thing the governing Liberal Party campaigned against during the election.
In two cases in this bill there is a movement toward less ministerial control. This bill states that the Canadian Grain Commission will have the power to set the salaries for the members of the eastern and western standards committees which have 26 members and the grain appeal tribunal which is made up of three members. This is in clauses 4 and 6 of this legislation.
Currently the salaries of members of these committees are fixed by governor in council at a $125 honorarium per day for non-government participants and $10 per sample for the grain appeal tribunal. The commission will now be setting the salaries for committee members in order to better reflect the reality and provide the Canadian Grain Commission with additional flexibility to make adjustments without having to go to order in council.
The second area I would like to talk about briefly this morning is the setting of maximum tariffs. Clause 14 and some following clauses eliminate over two years the requirement for the Canadian Grain Commission to set maximum tariffs charged by grain elevators. Instead the Canadian Grain Commission is provided with the discretion to decide whether or not it wishes to regulate this aspect of the grain industry while eliminating the requirement that elevator operators have to give advance notice to the Canadian Grain Commission of changes to elevator charges. Tariffs are fees charged for handling, cleaning, storage and drying of grain, that type of thing.
Removing these tariffs is a positive step. My concern though is with the grain companies that own primary, that is the country elevators, as well as terminal elevators. It is very common in the grains industry for companies to own the farm elevators that farmers ship directly to as well as the terminal elevators which are responsible for receiving the grain in port position and loading it on the ships. Those grain companies may lower the tariffs in the country elevators which is good, but they may at the same time raise the tariffs in the terminal elevators to make up for the cut rates in the country.
This would be fine if only these companies were dealing through their terminals. However these terminals are semi-public terminals by law which means that companies and individuals other than the owners are allowed to ship grain through the terminal.
I am afraid these changes may cause an increased rate at the terminal. The smaller companies which are provided an opportunity by law to deal through the terminals may be squeezed out of business. The rates could be raised beyond that which is reasonable.
Just to make this very clear, there is a provision in place which allows the Canadian Grain Commission to set a maximum in cases where the rate is raised too much. That provision is there and I will talk a bit about that in a minute.
The irony is that while I am concerned about this happening, the positive result from this type of action could be that the small companies may decide to improve the direct hit loading. That is simply loading directly from rail car to ships which started in the port of Vancouver and they may actually expand this to increase the competition. I see this as something positive.
The other positive thing that may result from this is more grain movement through the United States and through American terminals so that Canadian farmers have another option when there is a disruption in grain movement within Canada. That would encourage settlements by those in the grain handling industry, including the companies that own the business and labour. Settlement may be encouraged if they know there is competition so that they cannot stop the flow of grain.
I touched on my concern before about the Canadian Grain Commission or order in council maintaining the power to set the maxmimum tariffs. By getting rid of the maximum tariffs it gives the grain buyers more authority to penalize people who put grain in terminals and do not move it quickly enough. This is in clause 14 of the bill. I believe this is a good move. However, since we know that government wants to increase and not decrease the authority of the Canadian Wheat Board for example, cabinet just may choose to reverse these penalties in cases where the Canadian Wheat Board is affected.
Could the ability to invoke governor in council authority be used in the future by government to give even more power to the central selling desk of the Canadian Wheat Board to further regulate the grain sector? This is a legitimate concern.
With the present legislation the terminals do not have the power to penalize the Canadian Wheat Board for dumping grain for which they do not have an immediate buyer. All other shippers of grain must have a buyer ready before they can move the grain to port. The Canadian Wheat Board is the exception.
We have found over this past year that the Canadian Wheat Board moved grain into terminal position for which it had no buyer. This was the case particularly in Thunder Bay. Without the ability of the companies that own the terminals to raise the tariffs, this put them at a disadvantage because they could not move the grain due to the terminals being plugged with Canadian Wheat Board grain. At least now the law provides for them to raise this rate, but it also provides for the minister to say: "No, this is out of line. We are going to lower the rate".
That overriding power concerns me. I understand there is some need for that because in a business where there really is not enough open competition there could be a rise in tariffs which is not justified. There is a balance. It is tricky to find the balance, but I am just expressing some of my concerns.
The third area I want to talk about today is bonding and licensing requirements and the proposed changes under this piece of legislation. A major change in the bill involves the clear legislative removal of any responsibility on the part of the Canadian Grain Commission and therefore the taxpayers, above the level of the bond that is posted by the Canadian Grain Commission to a licensed company. In the past, courts have required the Canadian Grain Commission to cover losses above the bond level.
Companies buy bonds to protect the customers they do business with against losses up to the bond level if they go out of business. In the past the courts have determined that somehow the Canadian Grain Commission and therefore the taxpayers have a responsibility to cover losses above the level of the bond.
However in at least two cases over the past years taxpayers have also been forced to cover losses for companies which have not been licensed under the Canadian Grain Commission. Therefore, there is no responsibility on the part of the Canadian Grain Commission or the taxpayers. The Auditor General was very critical of the bailouts of these two companies which seemed to be politically motivated.
With the changes that are made in this area there is no doubt at all that farmers will not be protected above the level of the bond. The courts will not be able to determine that taxpayers should somehow be held responsible for farmers and grain companies through funds from the Canadian Grain Commission.
The Canadian Grain Commission does however monitor these bonds to try to determine whether the licensed companies are operating within the level of the bonds. This is a very difficult thing to do and it is very expensive. It is a function which does offer some degree of protection. At the same time while the monitoring is there, the grain commission is not responsible if the monitoring is ineffective. That is a concern.
Once again the Canadian Grain Commission has the power but does not take the responsibility for its mistakes. It has the power to refuse to licence a company, to require expensive insurance and bonding. It spends the money to perform these functions, but again the only protection is provided by the companies and the protection is only up to the level of the bond. It is important that farmers know this.
For this reason I believe that elevators and grain dealers should have the right to choose to opt out of this licensing and bonding requirement. This was the reason for my first amendment to Bill C-51, Motion No. 3, which was debated and defeated at report stage. That amendment would have allowed individual elevator companies, grain dealers, to choose to opt out of the licensing requirements under the Canada Grain Act.
It is very expensive and very difficult for some small companies to provide the bonding and insurance the Canadian Grain Commission may require. In those cases these companies could have chosen to opt out.
The protection we offered to farmers and people doing business with these companies is that on the premises there would be a sign very clearly stating that the place of business was not licensed under the Canadian Grain Commission. As is done in other areas with this type of body, on the front of every contract it would have been required to clearly state that the company you were about to enter into a contract with was not licensed under the Canada Grain Act. That was the protection for farmers.
As well, the amendment would have provided the flexibility so that when a company did opt out it no longer had to meet any of the requirements of the Canada Grain Act. This amendment would also have allowed companies, if they chose, to use the grading and inspection services that the Canadian Grain Commission provides, of course at a cost as is done now.
There are a few other points that I want to raise. One further clause in this bill authorizes the Canadian Grain Commission to suspend licences of primary elevators where overages exceed allowable limits.
Overage is just a difference between the amount of grain an elevator has in store compared to the amount it should have in store when looking at the records of shipments and receipts of grain. This is to offer some protection that in fact companies are paying their customers for what has been brought in and put through the facility.
Another clause confirms the authority of the Canadian Grain Commission to require operators to fully insure the grain in their elevators. It requires that prospective licensees provide specified financial data which demonstrates their financial viability.
What they are talking about here is a little bit closer monitoring of the bonds. While it is impossible to make sure that a company is operating within the bond level, it was pretty clear from what happened in the past when companies failed that the monitoring was not as good as it should be.
A further step in this bill involves movement of grain within Canada. This may surprise some people although people who are knowledgeable in the grain industry know this, the legislation seems to grant free movement within the eastern division or within the western division, a line drawn just west of Thunder Bay. This is in clause 25 of this bill. My question is: Why should there be any restriction to interprovincial trade and grain in this country? Yet, there is.
This legislation will allow free movement within the eastern division or within the western division but not between the two divisions. This seems absurd. To add further to that under the Canadian Wheat Board Act it is still against the law to transport grain from province to province even within a division. This seems absurd when you consider we are moving to more free and open trade with the world.
A further change requires that licensed grain dealers use the Canada Grain Act grade names in all of their transactions with farmers and grant the authority of the Canadian Grain Commission to act against companies which illegally use them. This has almost been a normal practice in the industry and this change only legitimizes what is already happening.
My concern is that dealers do not have the right to operate as unlicensed businesses. They may apply to the Canadian Grain Commission which may choose to grant them the right to operate without a licence but it is not a right. Of course my amendment which was defeated at report stage would have provided this as a right.
I believe that farmers and dealers in the industry want a change which will allow a dealer to operate as an unlicensed dealer and choose to deal in either ungraded grain or grain which has been graded by the Canadian Grain Commission. They want the choice. Because farmers are paying for the majority of the operating costs of the Canadian Grain Commission, they should be provided with the choice.
In conclusion, one witness in committee referred to the bill as the reregulation of the industry. The time has come for an open and honest evaluation of the role of the Canadian Grain Commission to determine what functions it should perform and how it should perform them.
The evaluation must determine what farmers want in areas that affect them and what others in the industry want in areas that affect them. The role of the Canadian Grain Commission should be to provide no more or no less than what is wanted by players in the industry.