Mr. Speaker, I am pleased to speak on probably one of the most important issues to affect western Canada and in effect the whole country with the reform of the rail transportation pertaining to grain handling.
As the minister said, all those involved in the western grain handling and transportation system agree that the system is broken and it must be fixed. This includes farmers, grain companies and yes, even the regulators like the NFU and the Canadian Wheat Board. They agree that something has to be done because the system is not great.
The western Canadian grain industry however has not been well served by the legislation that is being brought in today. The problem is not the consensus among the farmers and the farm community. The problem is clearly the difference between those who highly regulate the grain industry and farmers through the use of monopolies and those that would use the democratic free market system to attain the most efficient and effective grain transportation system. Clearly that is what the debate is about. It is sad to see that once again the regulators held sway with the Liberal government.
When we talk about who speaks for farmers, we should make one quick point that the farmers own two grain companies, the Saskatchewan Wheat Pool and Agricore which represents Alberta and Manitoba. Also, farmers are on the board of directors of the United Grain Growers. Representatives of private industry are primarily James Richardson with Pioneer, Cargill, Louis Dreyfus and the Patterson grain company out west.
These people and organizations identified very clearly to the minister on behalf of farmers, the very people that would make or break from changes to the grain transportation system, that the whole system has to move to a commercial contract system of moving grain. They did not ask to move an inch. They did not ask to move a foot. They asked to move the whole yard to the goal line. That is why I say today that this solution will not work in the best interests of farmers in the long term.
As my colleague said, the Canadian Alliance will support this legislation only with the recognition that the Liberal government is only capable of dealing with the western grain industry through regulation and cannot see its way clear to move to the marketplace to have it improved.
The current system is rigid, unaccountable and does not efficiently serve the needs of the participants including farmers. Severe systemic breakdowns in the handling and transportation system which recur every few years are demonstrations of this need.
The system does not just cost farmers. When the problems reach the news it costs them money every day. The inefficient use of our grain handling and transportation system means that every day farmers pay far too much to get their grain to port. It is not because of the fact that there is not enough regulation, it is because there is too much regulation.
Because of the control the Canadian Wheat Board exerts over the system, grain companies and railways cannot manage their facilities and equipment in the most efficient manner. For example, railways and grain companies have tried to set up regularly scheduled grain trains that would cycle between primary elevators on the prairies and the terminal elevators at the ports. These types of dedicated trains would be able to bypass railway switching yards, would make more efficient use of railway and grain company staff and would allow grain companies to better plan the arrival of ships and save farmers millions of dollars.
The minister referred to just on time deliveries. The rest of the Canadian economy has moved to that system. A regulated system is being imposed on the western Canadian grain industry when the rest of the country is benefiting.
It reminds me of the famous free trade debate. Ontario and Quebec were most fortunate over the years to have had the auto pact agreement and eventually the free trade agreement which included the rest of the country. Here again, why can western Canadian grain farmers not be included along with the rest of the industries of this country?
After the debacle in the winter of 1997 former Justice Willard Estey was asked to review the western grain handling and transportation system and to recommend changes to the government. Much to the government's surprise, he did exactly what it asked him to do and recommended changes to improve the system. The underlying theme of Justice Estey's 15 different recommendations is the need for a more open, market based grain handling and transportation system.
One of the key recommendations from Justice Estey involved the role of the Canadian Wheat Board. I would like to point out that neither Justice Estey nor Mr. Kroeger nor the Canadian Alliance is recommending that the Canadian Wheat Board be disbanded. In the case of these amendments to the Canadian Transportation Act the recommendation, including our position, is that the Canadian Wheat Board should be at the port level doing what its job is, marketing grains on behalf of farmers and doing the best job possible. That is where it can increase the farmers' income.
The Canadian Wheat Board reduces the farmers' income when it arbitrarily, for decision making purposes known only to it, uses rail allocation to maintain control of an industry with no market signals coming in whatsoever indicating to it where efficiencies could be gained, should be gained, and how to do a more effective job.
It is like a government sitting in Ottawa trying to micromanage the Canadian economy. That is what the government is trying to do through the wheat board with the Canadian grain industry. One cannot run a grain industry from the backrooms of parliament.
If the recommendations Mr. Estey put forward were implemented, the Canadian Wheat Board would hire the grain companies to move grain to the port through an auction process, a tendering process, and the grain companies would be responsible for arranging freight with the railways. Producers would sign contracts with grain companies for the delivery of the grain. This recommendation is required if we are to replace the current centrally planned system with a commercial contract driven system. However, as I pointed out, the Liberal government did not like the recommendations which would have softened the Canadian Wheat Board's ironclad hold on western grain farmers.
I will just say one last thing about the Canadian Wheat Board. The farmers should be able to have a vote with the delivery of their grain to the marketer of their choice. It may be according to the Canadian Wheat Board in particular that all the farmers, knowing the big advantages the wheat board puts out, would continue to market the farmers' grain, but let us let the farmer decide that for himself based on his own farm's best interests.
Mr. Kroeger appeared before the Standing Committee on Transport. He stated, “My conclusion was very much along the line of Justice Estey's, that unless you went to a more commercial system, you could not really achieve major improvements”. Mr. Kroeger gave the federal government a progressive report that if implemented, would be a step toward a more efficient, commercial, accountable western grain handling and transportation system.
At some point I have mentioned all the grain companies, the railways, many farmers, and the two gentlemen who did special studies and held massive consultations across the country. To me the evidence is overwhelming as to where we should have moved as a country and where this legislation should be today, but it is not.
Western farmers repeatedly said that freight is one of their major costs, approximately one-third of the expenses in most cases. Over and over again farmers ask why they are the only commodity group where the producer pays the freight and is responsible for the condition and any added cost for the product throughout the shipping network. The farmer consistently ends up holding the bag in this whole system. That should have been changed, could have been changed, but it has not.
The Prairie Farm Commodity Coalition estimates that reforms to the current grain handling transportation system could have saved farmers over $300 million annually. That figure can be argued either way a bit, but it is certainly more than the estimated $178 million the minister is talking about.
I would like to point out that the figure of $178 million is based upon the idea of about 30 million tonnes of grain delivery in a year. The fact is that in 1998, the figure was only about $26 million. Once again, just like in the AIDA program, the government is throwing out figures that sound great and glorious, but when it comes down to the final crux and the farmer sees his final bill, we may see that the saving to farmers is not the $178 million the government is putting out to the newspapers.
The effects in the long term and even in the short term of two or three years may soon come home to roost and show that this legislation has done little or nothing for farmers, as they see the loss of exports, if this system does not improve. I question that this will improve the system sufficiently for our customers to consider us to be a reliable exporter.
The government is claiming that the system will be more commercial and accountable because it is reducing the role of the Canadian Wheat Board in grain transportation. Sadly this is not the case. Key to the government's plan is a memorandum of understanding that will detail how the Canadian Wheat Board will carry out the tendering process.
We should remind everyone interested in the debate who is listening, including many city people, that the Canadian Wheat Board is simply an arm of the government. It is directly under the control of the resource minister and the Canadian Wheat Board minister whom I call the Regina minister. We have recently found in this debate that we have the Toronto minister. Now we also have the Regina minister. I do not know exactly what handle has been attached to the minister of agriculture yet, but we will wait and see.
We hope to see the MOU entered here. We have asked and had conflicting statements from the ministers with regard to it. I think we will find it difficult to pin down the triumvirate of the agriculture minister, the transport minister and the wheat board minister as to who will be the real spokesman. I encourage the Prime Minister to allow the transport minister to be the spokesman for this legislation and to have the minister of the wheat board step back and let the responsibility fall where it should with the transport minister.
I do not believe that the Canadian Wheat Board will draft any proposal that will reduce its ironclad control over the grain handling and transportation system. Under the MOU the Canadian Wheat Board will likely still be directly negotiating with the railways for hopper cars, even for the 25% of grain movement that will be tendered to the grain companies.
In short, nothing has changed. The Canadian Wheat Board is still between the grain companies and the railways. This system is neither commercial nor accountable. The Liberal government's decision comes after the Canadian Wheat Board launched an estimated $200,000 advertising campaign against the changes proposed by Justice Estey and Mr. Kroeger.
At the recent Liberal policy convention, the Liberal delegates overwhelmingly passed a motion calling for the Canadian Wheat Board's continued involvement in the grain handling and transportation system. Instead of listening to Canadian farmers, the Liberal transport minister has listened to Liberal delegates, the majority of whom come from outside western Canada. He has listened to the Canadian Wheat Board lobby.
The big players, the players that are actually being affected by the legislation, were relatively unanimous. From the level of farmer through to the grain companies and the railways, those who were direct players in this system were not listened to as we see from the legislation.
Many farmers are appreciative of having regulated freight rates lowered. I have stated already that I agree it will be beneficial to have those rates lowered, but I do not think that many farmers totally agree with the Liberal caucus and the Canadian Wheat Board.
The ad hoc coalition for transport reform actually represents 14 farm organizations in five provinces. There are officials from the grain industry. I did not mention this, but the people at the ports of Vancouver, Prince Rupert and Thunder Bay are also concerned. The government of Alberta is involved. The Canadian Industrial Transportation Association and the Northwest Corridor Development Corporation are involved in advocating on behalf of this system. The coalition stated:
We are firmly convinced that reforming the grain handling and transportation system will lower transportation costs to farmers, increase competition and make Canada's grain delivery system more effective for our farmers. But a balanced package is needed. If the government only acts on the railway issues, it will accomplish nothing and could make the system even worse. That is why we want the government to take immediate action on the most important issue and to end the role of the Canadian Wheat Board in transportation.
I do not know how much more overwhelming it could be to the government than all the documentation it has received from the coalitions, grain companies, farmers and many others. Surely the weight of opinion should have carried the day. Even someone not knowing anything about the grain handling system and talking pure economics would have told the minister that regulating a commercial enterprise was the most inefficient way of doing it.
We need only look at many crown corporations. I think of the B.C. ferries and the wonderful things governments have tried to do in the area of commercial enterprise. It does not work.
We need only look back to when the government owned Canadian National Railway. Why oh why did our grain not move in the most efficient and cost effective way when the government owned Canadian National Railways? It was because when the government owned that railway it was highly regulated. There were no market signals to bring efficiencies into it. Every time there needed to be a wage settlement, pay raises and that kind of thing, there was no relation to market forces. It was just that it was the government and it had taxpayer money. The government could take that money from taxpayers whether or not they wanted the government to have it.
As a result, we ended up with Canadian National Railway dragging down Canadian Pacific Railway into the same mediocrity. That is what is wrong with the whole regulated system. If it could have worked, it would have worked when the government owned CN Railway.
With those comments I think I have made the point quite clearly that the highly regulated system being imposed on Canadian farmers, the rail industry, the grain companies and the ports will not work.
I will leave this last message. We in the Canadian Alliance will be continuing to advocate and pressure for the real changes needed to make our western Canadian farmers economically self-sustainable and for the whole industry to prosper and contribute to the well-being of Canadians across the country.