moved that Bill C-4, an act to amend the Canadian Wheat Board Act and to make consequential amendments to other acts, be read the third time and passed.
Mr. Speaker, I am very pleased to open this third reading debate on Bill C-4, an act to amend the Canadian Wheat Board Act, a set of proposals which will bring about the biggest changes in the Canadian Wheat Board in more than 50 years.
The great public debate about western grain marketing has been ongoing across the prairies for at least 25 years. Some would say even longer. It reached a high boil in the early years of this decade after the Mulroney government attempted to diminish the CWB through a combination of benign neglect, sabotage and mandate reductions without parliamentary authorization and without any meaningful consultation with farmers. This was the situation that our government inherited when we came to office at the end of 1993.
Our first 18 months in government were devoted to successfully defending Canadian grain trade against unwarranted attacks from south of the boarder. Then in the summer of 1995 we set up the western grain marketing panel to bring some focus to a prairie grain marketing argument that was generating far more heat than light.
This was the commencement of a consultative process which was probably the most exhaustive and exhausting in the history of the western grains industry. Countless meetings, hearings, seminars, surveys, focus groups, questionnaires, votes, pamphlets, petitions, faxes, e-mails, Internet messages, personal and public letters and good old-fashioned phone calls. More people had more opportunity to participate in this very public and transparent process than ever before, and literally thousands did so.
All the advice we received was valuable, but much of it was conflicting. The most vocal participants in the debate exposed sharply polarized views among different groups of farmers with little scope for consensus in between. What some would consider basic marketing freedom others regarded as a policy straight-jacket and vice versa.
The most extreme lobbyists typically argued for government to listen only to them, that only their views were worthy of consideration and all others should simply be ignored. But government does not have that luxury.
Bill C-4 represents an honest attempt to find some reasonable common ground. It safeguards our grain marketing strengths. Strengths like the shear size and marketing clout to go toe to toe with the biggest and toughest in 70 countries around the world and to come out a winner for Canada. Strengths like being a $6 billion enterprise, this country's fifth largest exporter and Canada's biggest net earner of foreign exchange. Strengths like the ability to transform our 6% or 7% of global wheat and barley production into a global market share for Canada that is close to 20%. Strengths like a reputation in the eyes of our customers for being the very best in the world in terms of intrinsic quality, cleanliness, consistency, technical support, dependability, contract execution and customer service. Strengths life verified price premiums in many markets and operating costs as low as a nickel per bushel.
In aggregate terms, it is an operating structure that costs less per year than the amount of money the Canadian Wheat Board earns on its annual interest rate savings because its credit rating is so strong.
Bill C-4 also responds to a strong desire among farmers for Canadian Wheat Board modernization and change. It democratizes the wheat board's governance. It deepens the wheat board's accountability. It enhances the wheat board's flexibility, creating more options and speeding up cash flows. It empowers producers with greater control over what their marketing agency does and does not do.
That is what Bill C-4 is all about, putting farmers in the driver's seat like never before. It follows close to three years of sincere effort to try to accommodate competing points of view.
The debate has been intense, and that is not surprising. It is perfectly normal for farmers and farm organizations to hold strong views about grain marketing legislation and to express themselves vigorously. That is their right.
But it is regrettable that some totally extraneous lobby groups, non-farmers in effect, have attempted to pervert the legitimate debate about Bill C-4 with a grossly irresponsible disinformation campaign. The worst has been the national citizens' coalition, a non-farm group of well heeled right wingers led by a fallen Reformer who wouldn't know a bushel of barley from a bucket of rice. It has spent tens of thousands of dollars disseminating false and misleading propaganda.
The NCC's latest ideological abuse has been an absolutely indecent attempt to link the Canadian Wheat Board to the internment of Japanese persons during the second world war. That notion is utterly abhorrent. It betrays the NCC's true intent and that of those who would associate with the NCC in a mindless crusade, financed handsomely in secret to destroy the Canadian Wheat Board and to settle for nothing less.
The NCC's tactics try to make a virtue of knee-jerk extremism and intolerance. I have no intention of dignifying its allegations with any reasoned response.
Where I do want to concentrate is on those legitimate questions which come from genuine farmers who want to know what Bill C-4 will mean to them. I have compiled a list of such questions, about 10 or so, to which I want to respond in full detail.
Question one: Will the Canadian Wheat Board become more accountable to farmers? The answer is emphatically yes.
For the first time in its history the Canadian Wheat Board will be run by a board of directors. There will be 15 directors in total. Farmers will take control over their marketing agency by directly electing 10 of those directors, a two-thirds majority. The elected directors will reflect the views of farmers in CWB decision making. They will be expected to demonstrate accountability to producers because ultimately if producers are not satisfied with what the CWB is doing, they can change those directors in subsequent elections. That is what democracy is all about.
Question two: Will the directors have real power? Again the answer is yes.
As in any modern day corporation, all of the powers of the CWB will be placed in the hands of its directors. They will carry a heavy load of responsibility being in charge of a $6 billion enterprise. The directors will select one of their own to be chairperson. They will determine the salaries of the directors, the chair and the president. They will oversee the Canadian Wheat Board's management and they will control its strategic direction.
If the directors are not satisfied with any aspect of CWB operations, they will be able to make the necessary changes, including the introduction of flexible new marketing tools such as cash trading, expedited adjustment payments and early pool cash outs. The directors will be in charge and they will decide, not the babbling baboons in the Reform Party.
Question three: Will the directors have complete access to all Canadian Wheat Board information? Again the answer is yes.
All directors will be entitled to complete disclosure of all Canadian Wheat Board facts and figures, including but not limited to fully audited financial statements. They will be able to examine the prices at which grain is sold, the price premiums achieved, all operating costs and whether the CWB is running efficiently. With their full knowledge as directors about the Canadian Wheat Board and its global competition the directors would be in the best position to assess what information should be made public and what for commercial reasons should remain confidential.
Question four: Is the Canadian Wheat Board subject to a full audit like any private sector company? The answer is yes.
The Canadian Wheat Board's duly appointed external auditor chosen from the private sector is the well-respected accounting firm of Deloitte & Touche. Fully audited financial statements appear in every CWB annual report. Additionally under the new law the producer controlled board of directors will have the power to create their own internal audit committee just like any private sector company.
The argument has been made by the Reform Party that the auditor general should replace Deloitte & Touche as the CWB's auditor. That is a bit of a strange twist since such an arrangement would link the CWB closer to government, which is a complete contradiction of the Reform Party's basic philosophy. But let us examine why the wheat board is audited by an external independent private sector firm.
The CWB is obviously a commercial operation. As such it makes reasonable sense for its auditor to be drawn from the private sector. Also, where you can make a case for the auditor general to scrutinize the accounts of government departments and agencies which regularly spend public money appropriated by Parliament, the Canadian Wheat Board does not represent a regular draw upon the public purse. Its funds come from its grain sales and that money belongs to farmers, not the government.
In auditing the wheat board's books, Deloitte & Touche applied the same accounting standards and principles as would the auditor general. Its reports are fully available publicly. The Canadian Wheat Board provides more public disclosure than any of its private sector counterparts.
All of that having been said, read the audit report filed by the auditor general in relation to any government agency and compare it to the report filed by Deloitte & Touche with respect to the Canadian Wheat Board. You will find that the auditor's certificate is virtually word for word identical.
Having said all of that, under the new democratic corporate governance regime established by Bill C-4, if the Canadian Wheat Board's new board of directors believe a change should be made in how or by whom the Canadian Wheat Board is audited, they can make that recommendation.
There is one final telling point. If opposition members are truly concerned about something being amiss in the Canadian Wheat Board's audit, they have the full authority to call the auditor, Deloitte & Touche, before the House of Commons Standing Committee on Agriculture and Agri-food for a full-scale hearing. They can make their own inquiry in public right now. The committee has that power. The fact that they have never even asked is at least some indication that they are not really interested in fact finding or financial probity. They just want another excuse to attack the wheat board.
Question five: Is it necessary for the government to appoint some directors and the president? The answer is yes for two reasons.
First, Canadian taxpayers backstop the CWB with financial guarantees totalling as much as $6 billion annually, covering not only initial payments and credit sales but also, unlike any other marketing agency, the Canadian Wheat Board's general borrowings. Second, the wheat board is responsible for issuing all wheat and barley export licences for all of Canada, not just the prairies. Therefore it performs a national function.
The appointed directors, five in total, will have no special power or status. They will be selected to bring additional expertise to the board of directors which might not otherwise be available internally. Such appointments are quite common in both the public sector and the private sector. Ultimately the appointed directors will be in a minority position with prairie farmers controlling a two-thirds elected majority on the board of directors.
Question six: Can the directors effectively demonstrate their disapproval of a president? The answer again is yes.
The government can appoint a president only after it has consulted with the directors. Once the president is appointed, the directors have the regular power to review his or her performance and to recommend dismissal if they believe that is appropriate. Finally—and this is the real hammer—the directors also control the president's salary.
Question seven: Does this new law shield Canadian Wheat Board personnel from legal responsibility? The answer is emphatically no.
No one is shielded from their responsibilities. In fact all Canadian Wheat Board directors and officers will be under an explicit obligation in the law to act honestly and in good faith, exercising all reasonable care, diligence and skill.
In the event of legal proceedings against them they may be able to claim compensation for certain legal expenses if and only if a court is ultimately satisfied that the person in question acted honestly and in good faith.
In this connection, to be consistent with the standards that apply in the private sector, the CWB law will mirror provisions in the Canada Business Corporations Act which govern the conduct of private companies in this regard.
Question eight: Does the Canadian Wheat Board need a contingency fund? The answer is yes.
To provide more flexibility on how farmers are paid for their grain and to speed up cash flows, the CWB's board of directors will have the power to authorize cash purchases of wheat or barley; to authorize adjustments to increase initial payments quickly just as soon as market conditions warrant and without waiting for government approval; and to authorize an option allowing individuals to cash out of a marketing pool early before the end of the crop year. The directors would implement these new flexibility tools when in their good judgment it would be beneficial to farmers to do so.
But as with all new innovations, there could be some new financial risks. Like an insurance policy to serve as a safeguard against any such unforeseen new risks, the directors need the ability to develop a contingency fund. The law will specify that such a fund could be used only in relation to the three purposes mentioned above. It would then be up to the board of directors, which includes a two-thirds majority elected by farmers, to decide if, when and how to create it. In any event the Government of Canada will continue to guarantee the CWB's initial payments set at the start of the crop year, its credit sales and its general borrowings.
Question nine is about exclusions. Can farmers get a crop removed from the CWB's jurisdiction? The answer under Bill C-4 is yes.
The new law will contain an exclusion clause to allow any kind, type, class or grade of wheat or barley to be removed in whole or in part from the CWB's jurisdiction. To trigger it, the directors would first have to vote in favour of the idea. Second, for quality control reasons, a system would need to be in place to prevent any mixing of the excluded grain with CWB grain. Third, if the directors considered any proposed exclusion to be significant, a democratic producer vote would be needed to approve it.
Question ten is about inclusions. Can farmers get a crop added to the CWB's jurisdiction if that is their will? The answer again under Bill C-4 is yes.
As a matter of fairness and balance, just as there is an exclusion clause, there will also be an inclusion clause in the new law. The deciding factor in relation to both clauses will be the majority preference of the actual producers of the grain in question as expressed through a democratic vote of those producers. They will be in control.
The existence of an inclusion clause does not by itself change the CWB's mandate. It merely sets out a clear procedure for doing so if and only if producers themselves, not politicians or lobbyists, believe such a change is in their best interests. The inclusion clause would be available only for crops that currently come within the definition of grain in the existing CWB act.
Neither the government nor the CWB, nor any minority interest group could trigger the process. Only the producers of the grain in question could do so in the form of a written request from a legitimate organization whose membership consists solely of the producers of that grain.
The request would have to be advertised publicly, leaving at least 120 days for the farm community and others to react. The CWB's board of directors which includes a two-thirds majority elected by farmers would then consider the request. The directors would need to examine all of the implications of such a move, including among other things the costs of an inclusion, trade or commercial consequences and the public comments received.
If the directors ultimately agreed with the request for an inclusion, the whole matter would then have to be put to a democratic vote among the producers of the grain in question for their decision and ratification. The whole process, beginning, middle and end, would be transparent and fully in the hands of farmers. It would not be in the hands of politicians like the mindless mouth that keeps babbling across the way, insulting the intelligence of farmers. The authority would not be in hands like that or in the hands of politicians. The authority and the power would be in the hands of farmers where it belongs.
With respect to the inclusion clause, having said all that, the government and the minister have tried to be as flexible and as accommodating as possible in putting Bill C-4 into final form for passage by the House.
Over this past weekend, in further consultations with representatives of the canola industry we reviewed once again the reality of what is accomplished by the inclusion and exclusion clauses and the perception or misperception that such clauses might be used as some thinly veiled excuse by our competitors, perhaps the United States, to launch some form of trade harassment.
The United States would have no legal, economic or trade policy justification, but its conduct is often driven by very local U.S. domestic politics. That has caused Canadian canola representatives to be uncomfortable with the particular clauses, even though they acknowledge that they would be in complete control over whether these clauses ever get used.
To alleviate that worry, yesterday I proposed some final changes to Bill C-4 to remove from the draft bill those detailed provisions which deal with additions to or subtractions from the current mandate of the Canadian Wheat Board. Instead, I proposed the insertion of a simple, straightforward provision that would ensure that no minister responsible for the Canadian Wheat Board could attempt to change the wheat board's mandate, either to enlarge it or to reduce it, without first having conducted a democratic vote among the relevant producers and having consulted with the wheat board's new board of directors.
Such a change would have eliminated the problematic clauses while respecting and enshrining the fundamental principle of democratic producer control. The opposition said no to that proposition. It denied the clear opportunity to make that change. The government offered and the opposition refused even to let the matter come to a vote.
What does that tell us about the opposition? Is it really interested in constructive change? Is it really interested in the substance of the matter?