Madam Speaker, I thank the hon. member for Lisgar-Marquette for introducing Bill C-212, an act to amend the Canadian Wheat Board Act. It would require the board to be audited annually by the auditor general.
I am sure members are aware that the Canadian Wheat Board is a marketing board whose primary responsibility is to serve the producers whose products it sells. In fact, the producers have no way of knowing how well the board is performing. The only people who have any indication of the performance record of the board is its internal auditing firm and the minister of agriculture, who may or may not choose to reveal that information to the producers the board serves.
The hon. member for Lisgar-Marquette has talked about the need to open up the books of the Canadian Wheat Board to the auditor general so that he can report to Parliament and thereby report back to the producers that the board serves. I agree with the hon. member.
The member for Frontenac suggested that a performance evaluation would also be a wise undertaking by the auditor general. Perhaps that could be done on occasion as well as the annual audit of the books of the Canadian Wheat Board.
There was an performance analysis of the Canadian Wheat Board done by its auditors, Deloitte & Touche. This was instituted in 1992. Perhaps some would argue that we do not need to have the auditor general look at the efficiencies of the Canadian Wheat Board because its auditors are doing it.
The problem is that this report should have been presented to the minister of agriculture. If it was, the minister did not make the report public. It either gathered dust at the Canadian Wheat Board or the Privy Council. It was never released to farmers or the Canadian public. It became a secret document which contained much good information and was only recently unveiled to the public when copies were made available to me and other concerned people.
Does this report contain some top secret, classified information? Not at all. It contains information on the performance of the board, how well it is serving producers, whether or not it is doing a good job. Certainly the auditor general could perform such an evaluation on a regular basis and that would serve Canadians and farmers in the prairie region very well.
Let us look at the internal performance audit done by Deloitte & Touche of the Canadian Wheat Board. It discovered many areas of significant deficiency. This was all hushed up, kept secret. Farmers were not aware of the audit and the results.
On page 18 of the Deloitte & Touche performance evaluation, it states that there is no evidence of an ongoing formal corporate strategic plan or process. That is quite an allegation.
We asked the chief commissioner of the Canadian Wheat Board, Mr. Hehn, about that. He said: "Oh, well, we have dealt with all the concerns that were raised by the Deloitte & Touche audit. They have all been looked after". How do we know? It is all secret. It is all kept under wraps.
As far as the corporate structure of the board is concerned, it has not changed. There are still five commissioners appointed by the Privy Council, probably under the direction of the minister of agriculture or whoever pulls the minister's chain. Currently there are three commissioners running the board; one retired some time ago and another one recently stepped down because he could not agree with some things the board was doing. So presently three commissioners who were appointed by the minister of agriculture are running the Canadian Wheat Board and keeping everything secret.
The chief commissioner of the board said that they have adequately handled all the recommendations in the Deloitte & Touche audit. He has yet to convince me that he can answer the charge that there is no evidence of an ongoing formal corporate strategic plan or process, as was the criticism on page 18.
I quote again from page 19 of the report, regarding operational management and planning:
Departmental planning resulting in annual operational plans generally does not exist. Some departmental area plans have been submitted to the board with no feedback or approval. Budgeting and forecasting of expenses do not exist. This includes administrative expenses (excluding salaries) and annual operating expenditures (storage, interest and demurrage, etc) representing annual expenditures of approximately $200 million.
This is not small change. The board or senior management approves most or all of the administrative expenditures, individually, as incurred. That is what happens when the operation does not have a public audit. It is inefficient and there is no way of determining whether a problem has been rectified if one has been identified.
With respect to accountability, page 20 of the report reads:
Specific performance targets or expectations are not set and communicated for the senior operating management team or for senior managers. Senior management job descriptions are out of date, incomplete or non-existent. There is no formal performance appraisal process for senior management which reinforces accountability for meeting objectives.
At page 21 of the report there is a rather strong indictment of the structure of the Canadian Wheat Board. It reads:
The structure as designed (1930s) with five equal Commissioners and more than six direct or indirect reports does not promote efficient and effective delivery and accountability for the 1990s.
As members know, the corporate structure of the Canadian Wheat Board is still the same. That problem has not been rectified. It is still a 1930s model which does not serve western grain farmers well in the 1990s.
That was corporate governance. Now I will turn, in the Deloitte & Touche audit, to finance and accounting management. Regarding corporate planning and budgeting, at page 67 it reads:
A formal budgeting process does not exist for the Finance and Accounting expenditures department. There is no overall responsibility assigned to Finance for establishing and administering a corporate budgeting process. Salary expenditures are approved at the beginning of the year.
Obviously the hon. member for Lisgar-Marquette has very good reason to bring forward a private member's bill which would call for an annual audit of the Canadian Wheat Board by the auditor general. There has been no budgeting. There has been no accountability. There has been no responsibility assigned to finance for establishing and administering a corporate budgeting process. This is serious stuff.
Furthermore, we know that the commissioners' salaries have been kept secret. It has been leaked that they have extremely high salaries. We also know that they have a very cushy benefit package. We were astonished to find out that their severance package is around a quarter of a million dollars. Farmers' dollars are going to finance the commissioners and the farmers had no idea that such a plan existed for the commissioners of the Canadian Wheat Board. We need an audit to be done by the auditor general to expose these things.
Regarding the board's strategy and business direction, on page 78 of the audit it reads:
A formal corporate strategy does not exist for review and input to an MISD (Management Information Services Division) strategy. No formal assessment of business needs or direction was conducted as part of ISP project. Some information is known about the direction of the business but has not been used to evaluate the current system.
Page 78 continues under the heading "Identify Issues and Operations" by stating:
Information systems issues and opportunities were identified but were not based on an assessment of the current systems. As such, any opportunities with the current systems have been overlooked.
I have talked about corporate governance. I have talked about finance and accounting management and about strategy. I would like to go on to talk about the sales and marketing of the Canadian Wheat Board.
On page 31 of the Deloitte & Touche audit it states that no formal strategic marketing plan exists. This is the Canadian Wheat Board. It is supposed to be marketing farmers' grain. The internal audit said that no formal strategic marketing plan exists and this report was put on the shelf and kept away from the eyes of the producers whom the board is to serve.
Under the heading "Marketing Organization" on page 32 the report reads:
The marketing function lacks focus and co-ordination due to a lack of direction from a corporate governance point of view, the absence of an effective marketing plan, and separated departments within the organizational structure.
At page 35 the report reads:
Agents emphasize that relationships with the CWB are not sound/positive business relationships. Accredited export agents indicated that they are not being utilized as effectively as they might be in sales opportunities in niche markets and geographic markets where CWB market knowledge is limited and resources limited.
We are now getting into performance evaluation. I will conclude with the following point. The report on transportation states: "Several costs associated with transportation in grain movement
are primarily influenced by Canadian Wheat Board operations. However, there are no budgets or standards of performance for these such as storage and demurrage costs". We are talking about the sale of hopper cars in western Canada and whether they should be sold to the producers or to the railroads and who should allocate the cars.
If we would have had a proper evaluation of the Canadian Wheat Board by the auditor general it would have helped us to make wiser decisions about those cars. However, we have had that information kept from us and it has hurt the industry. It has increased the mistrust of farmers in the Canadian Wheat Board. Certainly this bill would solve that problem.