Mr. Speaker, I am pleased to rise in support of Bill C-40, an act to amend the Canada Grain Act and the Canada Transportation Act.
This bill amends the Canada Grain Act and the Canada Transportation Act in order to bring them in line with a decision by a special panel of the World Trade Organization, whereby certain practices of grain handling and transfer in Canada do not comply with Canada's obligations of national treatment under the 1994 General Agreement on Tariffs and Trade.
When we look at all the tremendous accomplishments of the Canadian agriculture and agri-food industry over the past 100 years, the Canadian grain sector stands out as a great success story in its own right. Today Canadian wheat, barley and other grains are known by our customers all over the world for their outstanding quality, consistency, cleanliness and innovation.
Each and every year Canada's grain industry does $10 billion worth of business here in Canada and around the world. Those dollars create jobs and prosperity for Canadians here at home. They support our rural communities, which are the lifeblood of Canada's economy. Canada's grain growers sustain our health and well-being as Canadians by putting the very bread on our tables. We must never forget that; to quote the old saying, “If you ate today, thank a farmer”.
Canadian grain is about much more than bread. It is about a large number of products, such as durum wheat in pasta, oats in porridge, barley in beer, and so on.
Whatever the product in question, when Canada's global customers purchase Canadian grain for processing, they can count on getting the same high levels of quality and cleanliness that they have come to expect, load after load. They can count on knowing exactly how that grain will perform during processing, load after load.
This world class reputation that our Canadian grains enjoy around the globe has been earned. It has been earned in large part through the hard work first and foremost by our farmers. It has also been earned by grain handling companies, by research scientists, and by organizations such as the Canadian Grain Commission, the Canadian International Grains Institute, the Canadian Wheat Board and others.
Today and for the future the Government of Canada will continue to stand behind both the Canadian grains and the Canadian oilseeds sectors. In March we announced a $1 billion farm income payment program of which we estimate about $480 million will help grains and oilseeds producers with immediate cash flow pressures brought about by a number of factors, including weather losses, low market prices and unfavourable exchange rates. These funds will help our producers as a long term strategy is put in place to help the sector deal with a projected continuing decline in grains and oilseeds commodity prices.
Part of the strategy is growing and expanding our export markets for grains. We are working in partnership with the Canadian grain sector to do that. We are also working to secure and maintain the world class grain quality assurance systems that continue to open new doors in marketplaces around the world.
As members of the House will know, Canada's marketing system for wheat has been challenged by the United States on a number of occasions in recent years. Each time the major issue has been the Canadian Wheat Board, and each time the ruling has gone in Canada's favour. Both at NAFTA and the World Trade Organization, panels have consistently upheld Canada's position that the Canadian Wheat Board is a fair trader and that its mandate, structure and activities are consistent with our international trading obligations.
In April 2004 a WTO dispute settlement panel ruled that the Canadian Wheat Board was consistent with Canada's international trade obligations. The U.S. immediately appealed. In August 2004 the appellate body of the WTO upheld the original ruling, namely, that the U.S. had not provided any evidence whatsoever that the Canadian Wheat Board had acted contrary to Canada's international trade obligations.
Once again that ruling confirmed that the Canadian Wheat Board operates within the rules. It further supports Canada's position at the WTO negotiating table, namely, the Canadian Wheat Board is a fair trader.
The WTO did find against Canada regarding certain grain handling and transportation policies. In response to those findings, Canada decided that changes to Canadian legislation could be made that would both serve to meet our international trade responsibilities and at the same time maintain our world-leading grain quality assurance systems.
To summarize briefly, the WTO ruling requires action by Canada on three particular grain policies currently in force under the auspices of the Canadian Grain Commission and Transport Canada.
The first is entry authorization requirements. Under the Canada Grain Act, permission must be sought from the Canadian Grain Commission before foreign grain can enter licensed Canadian elevators.
The second is mixing of foreign grain. Under the Canada Grain Act, permission must be sought from the Canadian Grain Commission before a foreign grain can be mixed with domestic grain.
The third is the rail revenue cap program. Under the Canada Transportation Act, a maximum is imposed on the revenues that railroads may receive on certain shipments of Canadian domestic grain.
To comply with the WTO rulings in these areas, the government is proposing amendments to the Canada Grain Act and the Canada Transportation Act. First, to address the issue of entry authorization requirements, the amendments to the Canada Grain Act remove the requirement that Canadian Grain Commission permission must be sought before foreign grain can enter licensed Canadian elevators. Instead, a regulation will be added requiring licensees operating grain elevators to report to the CGC the origin of all grain.
Second, to address the issue of mixing of foreign grain, the amendments remove the requirement that CGC permission must be sought before foreign grain can be mixed with eastern Canadian grain. The new regulation will also stipulate that if licensees operating elevators mix Canadian and foreign grain, they must identify that grain as mixed.
Further, all licensed elevator operators will be required to maintain the origin of grains at all times to ensure that grain is never misrepresented. It is essential that Canada continue to have the capacity to assure our buyers that they are getting what they pay for, namely, the consistent high quality they have come to expect from Canadian grain. The Canadian Grain Commission is confident that these changes in no way compromise our ability to do this.
In addition to the amendments to the CGA, amendments are required to the revenue cap provisions of the Canada Transportation Act in order to bring the cap into compliance with the WTO decision. One option would be to simply repeal the revenue cap provisions. Let me assure western Canadian grain farmers that the government has no intention of repealing the cap. It will function as usual for Canadian grain industry stakeholders.
Instead, the revenue cap will be extended to foreign grain that is imported into Canada. It will not apply to foreign grain that is in transit through Canada to some other destination. The government believes this change will not have a significant impact on the grain handling and transportation system.
At the same time, by implementing these changes, Canada will comply with our obligations under the WTO in the same way as we would expect other WTO member nations to do were they in our position.
The deadline for Canada to act in these matters has been negotiated with the U.S. It has been agreed that changes to the acts and associated regulations will need to be implemented by August 1, 2005.
Canada's grain quality assurance system is designed to ensure that the varieties of grain produced in Canada meet the strict quality specifications that customers have come to rely on.
We are confident that the amendments we are proposing today in no way compromise Canada's ability to fully protect and safeguard the integrity of this system, which has won and continues to win so many loyal customers the world over. We believe that Canada can conform with the WTO panel findings in a way that will have little practical impact on the Canadian grain handling and transportation system.
I can assure everyone that the grain sector is on side in the course of action we are taking. In fact, in January the parliamentary secretary for rural affairs held extensive consultations in western Canada with a wide range of stakeholders, including farmers, producer organizations, general farm groups, elevator operators and private grain companies. Overall, stakeholders were broadly supportive of the government's proposed approach and believed that the changes would have little or no impact on the current system.
There was also strong support for Canada to meet its WTO obligations. It is important to note that while indicating areas of non-compliance, the WTO panel nonetheless recognized Canada's fundamental right to maintain our own quality systems.
The WTO panel in no way ruled against grain quality assurance. In fact, the panel clearly articulated Canada's right to segregate grain to ensure the quality of grain shipments. Nothing in the ruling changes, compromises or dilutes Canada's fundamental right to safeguard the integrity of our world class grain quality systems.
The panel rulings back up Canada's position in the WTO negotiations, namely, that no disciplines on state trading enterprises, like the CWB, are needed beyond those agreed to by the WTO members in the July 2004 framework on agriculture.
It also supports our position that CWB is a fair trader, that its mandate, structure and activities are fully consistent with commercial considerations. It is Canada's hope that the decision by the WTO and our compliance in the areas I have outlined will lead other nations to turn the page and put our collective focus where it should be, namely on levelling the international playing field so our producers and processors can compete fairly and effectively in the global marketplace.
As the Doha round proceeds, Canada will continue to work closely with the Canadian grain sector and the entire range of agrifood stakeholders to achieve an outcome that is positive for the entire agrifood sector. We will continue to defend the ability of our producers to choose how to market their products, including through orderly marketing structures such as the CWB.
The whole of the agrifood sector and of the Canadian economy stand to gain from these negotiations. We are seeking prosperity for Canadians through secure access to markets around the world and we are seeking a stable and predictable business environment and a level playing field that will allow Canada's grain industry to leverage its competitive strengths to the maximum.
I am confident that the amendments to the Canada Grain Act and to the Canada Transportation Act which we are introducing today support those goals. That is why I support it and urge other members of the House to do the same.