Debates of May 14th, 2009

Agriculture and Agri-food--Main Estimates, 2009-10

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Madam Chair, the one thing we have seen through all of the introspections that have been done is that we need better communication and co-ordination of resources. There is no doubt about that. The member opposite is absolutely right. That is the type of situation that has been addressed. We have seen that work better during the H1N1 situation already. There was better communication and co-ordination of resources among all the affected groups. She is absolutely right.

[David Anderson, Conservative, Parliamentary Secretary to the Minister of Natural Resources and for the Canadian Wheat Board]

Madam Chair, it is good to be here tonight. I want to acknowledge the minister's willingness to be here tonight and his patience with the questions he has been asked. The knowledge that he shows on his files and portfolio has been outstanding and very impressive. I would also like to acknowledge the team that works with him on the ag committee. It is a team of very knowledgeable people. One of the things I notice about the caucus on this side of the House as opposed to the other side is that we have farmers over here. We have producers. We have people who work on the ground, who work the land. It seems to be very difficult to find any of those on the other side.

The challenge we face is how we allow our farmers to be competitive. In one area, this government is committed to bringing market choice to western Canada in order to make our farmers competitive. Under the strong leadership of the Prime Minister and the Minister of Agriculture and Agri-Food, the Government of Canada will continue to fight for farmers' freedom. The government will keep working with western Canadian grain farmers to ensure that they get the freedom they want.

We are going to continue to work to ensure transparency for producers and taxpayers as well. I am going to talk about that later. The CWB had significant losses in the financial markets in the 2007-08 marketing year. There has been no public performance review of the programs that caused those losses. I would like to look at CWB's ability to market grain. There is a lot of emotion attached to this issue. The best thing we could do is look at the results that have been studied that show what the Canadian Wheat Board is actually doing.

The Data Transmission Network, or DTN, has been an innovator in production and delivery of news and information since 1984. It is a trusted source that gathers agricultural information and publishes it. The DTN tells us that the average of U.S. elevator bid prices shows that for the last three years, the Canadian Wheat Board has earned less than farmers south of the border. This is one of the reasons western Canadian farmers are very unhappy with their marketing situation.

In 2007-08, the Wheat Board's final price on red spring with 13.5% protein was $1.70 a bushel below the U.S. average market price for similar wheat. The year before, the Wheat Board final was $1.17 per bushel below. The year before that, the Wheat Board again fell short of the U.S. average price by about 70¢ a bushel. I want to point out that it went from 70¢ to $1.17. Last year when the Wheat Board was touting itself as a huge success story, its final wheat price was actually $1.70 a bushel below the average posted in the United States.

[Wayne Easter, Liberal, Malpeque, PE]

How can you say that with a straight face, David? How can you tell that information with a straight face?

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

The member across the way wants to heckle me because he does not like the facts. If we cannot compare numbers, maybe we could look at one of the studies that has been done about the Wheat Board and mention a few of the facts here so that the member for Malpeque after all these years may finally come to understand the pain and suffering that western Canadian farmers really endure because of that organization.

The Informa study, which was put out in June 2008, has been recognized and well accepted. It showed that the Wheat Board earned no premium for farmers. U.S. farmers actually received higher prices for spring wheat in five of the last six years. Our farmers are at a competitive disadvantage to U.S. farmers in five out of six years.

Canadian Wheat Board spring wheat pool returns have been on the average of about $16 per tonne below North Dakota's prices. That is about 50¢ a bushel on average. That is a big difference for farmers. It adds up to a lot of money on their farms. Durum returns have been $12 a tonne below North American prices. U.S. farmers received higher malt barley prices. That is really frustrating because there is no one in this country who understands the malt barley marketing system in western Canada who believes that the Wheat Board is doing a good job.

If the people at the Wheat Board could find a way out of it, I think even they themselves would like to get out of that because they know they are not doing a good job for farmers. By contrast, in the last eight years on the free market, canola prices received by Canadian farmers have been higher than canola prices received by U.S. farmers. That shows that when our farmers are put in a situation where they can compete, they actually do well. They were actually stronger than the U.S. farmers.

I would like to talk about last year in particular, because farmers paid a huge price for this marketing system. Last year the Canadian Wheat Board lost over $300 million in its trading activities. It was farmers who were forced to take these losses because the Wheat Board does not pay for its mistakes. It does not have to, because it has someone to do that for it and that is the western Canadian farmers. The Wheat Board managed to lose $90 million from its producer payment options. It is called a contingency fund. It has been set up to handle these producer payment option programs. It lost $90 million in its trading in that fund. Even worse than that, in its regular discretionary trading, it lost another $226 million. I guess the conclusion most western Canadian farmers have reached is that the Canadian Wheat Board is just too expensive for them.

We believe that producers deserve to see a public arm's length review of the Canadian Wheat Board. That would be reasonable. It lost $300 million in its trading activity. It would be reasonable to ask that there be some sort of review. The reason we have had to request that the Auditor General come in was evident today in committee.

Wheat Board representatives were actually at the agriculture committee today. They talked about a small report they had done about the risk management practices. When we asked if members of the House of Commons Standing Committee on Agriculture and Agri-Food could have access to that report, they told us they would not let us have access to that report.

I do not know if I have been in a committee in the nine years that I have been here, where someone has refused to provide information to a committee. I cannot remember another time when that has happened.

We brought forward a motion to request that the board supply that report to the committee. The opposition worked very hard to stop that. In fact, Bill C-29 was to be discussed this afternoon and the opposition chose to filibuster the motion for us to get the report.

[Hedy Fry, Liberal, Vancouver Centre, BC]

That is not true.

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

Then, and this is the big surprise--

[Wayne Easter, Liberal, Malpeque, PE]

Not true.

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

--with half of the meeting left, the opposition members walked out of the committee so that they did not have to deal with the motion or Bill C-29.

[Joe Preston, Conservative, Elgin—Middlesex—London, ON]

Shameful.

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

It was very strange. You should have been there, Madam Chair. You would have wondered what happened. Actually, if members want to find out what happened, maybe they could read the transcripts. That would be the best place for people who really want to check out what happened. They would see the evidence of--

[An hon. member]

The antics.

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

Yes, the antics of the opposition on that committee.

We are committed to having western Canadian farmers have some understanding of what happened last year with the marketing problems that the Canadian Wheat Board had and the money that western Canadian farmers lost.

As the Minister of Agriculture and Agri-Food has said often, entrepreneurs need as many options as possible to market and sell their goods. This has never been more true than in today's economy.

We want farmers to have the freedom to choose whether to sell grain on the open market or through the Canadian Wheat Board. We believe that farmers deserve to have the ability to add value to their crops and capture more profits beyond the farm gate.

They also deserve to have the opportunity to seek out the best possible return for their own product, just as they can with canola, the pulse crops, cattle or any other number of farm products right across this country. They take all the risks, make all the investments and they should be able to have complete control of the marketing of their own products.

A Canadian Wheat Board monopoly on wheat was imposed by Parliament because of a variety of dynamics and reasons over 70 years ago. The barley monopoly is over 60 years old and today's market realities are vastly different. Today there are numerous new and growing exporters and export markets around the world.

We have moved away from the commodity procurement of the past where we just had bulk amounts of grain grown, bulk amounts sold and bulk amounts delivered to a situation in which a large number of mainly private buyers want to be able to select a range of quality attributes for particular market segments. This niche development is taking place everywhere.

In fact, the other day in the agriculture committee Dr. Brian Fowler talked about how many of the varieties that are being developed in Saskatoon and elsewhere in Saskatchewan cannot be used in Canada because of the Canadian Wheat Board marketing system. Our good friends in Montana and other American states get to benefit from the research that is done in our country because of our marketing system.

Buyers want high quality products which Canadians produce but they want them delivered at a certain time, in a certain way, in a manner that farmers are best able to meet. Farmers are looking for new value-added revenue streams and greater marketing flexibility. We are listening to farmers. We want them to succeed.

Currently by law, western Canadian grain growers do not have the same rights as other producers in this country about where to sell their products. They do not have the rights that they enjoy with their other crops.

[The Deputy Chair, NDP, Denise Savoie]

I must interrupt the hon. parliamentary secretary at this point. The 10 minutes for his intervention are over. Does he have a question for the minister?

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

Madam Chair, voters in western Canada, where the Canadian Wheat Board operates, consistently elect Conservative MPs fighting for market choice. The Liberal Party and the NDP do not have a single seat in those western wheat-growing areas, yet they claim to represent western farmers, as does the Bloc, by the way. They also claim that farmers do not want choice. Could the minister tell us why they do not have seats in western Canada? Is it because they refuse to give farmers choice?

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Madam Chair, there are a number of situations that underscore it, including the gun registry. One could lump all three of the parties in with that failed system, too.

The problem one sees with programs that are out of date and are 60 or 70 years old on marketing barley, is that one cannot address today's challenges with yesterday's programs. One just cannot do that, and farmers are the first to say so. The problem we have is that the Wheat Board then maybe filled a role that government saw, but it never filled a role that farmers saw.

The Wheat Board has become a monopoly buyer, not a monopoly seller. Over half of the product it now buys on paper is exported or used domestically by the line companies, even by the independent terminals. It is a monopoly buyer, not a monopoly seller. When the member pointed out the numbers, the hon. member for Malpeque took exception to them, but those are quantifiable numbers. They are there.

Farmers are on the Internet. Years ago when the government first talked about high-speed Internet access, farmers were the first ones to leap on that, whether through satellite, dial-up, whatever, so they could check what their American cousins were doing. We have a number of farmers who farm on both sides of the border, so we know those comparisons are accurate.

In western Canada we are missing the ability to value add in an efficient way. Right now we have an arcane system where one has to phone the board and say, “I have 5,000 bushels of barley I want to take to Biggar”, which is 40 miles from where I live. I trucked it myself. I paid freight and elevation to tide water. I had to do a buy-back from the board and I had not even loaded it onto my truck yet. That is the ridiculous situation we find. If we had a little thing called property rights in this country, it would take care of a lot of that, too.

We are not allowed to value add. There is a 500,000 tonne shortfall of malt barley globally. We grow the best malt barley anywhere in the world in western Canada, and we are not allowed to make it into malt because we cannot get by that little hurdle called the Canadian Wheat Board.

We have tried. We did a plebiscite; we did a referendum, if one wants to call it that, which is required by the act. Sixty-two per cent of farmers responded by saying that the status quo is not good enough, that we have to move beyond.

The Wheat Board asks very similar questions all the time. The same responses came back with very similar numbers. It said it would address this by coming up with a new program called cash plus. It tried to develop a program where it would give farmers most of their money upfront. It did that, and farmers would not buy into it because it is too restrictive, too narrow in focus like the old farm programs were.

The Wheat Board, to save itself and win the public relations war, tried to develop new programs. The member alluded to the losses in the contingency fund, which is what backstops those new programs. It was $40 million a couple of years ago. The board had an introspective look done on it called the Gibson report, and the board felt it had everything fixed. What happened last year? It lost two-and-a-half times as much after it said it had everything fixed.

The Wheat Board just cannot understand this free market idea. Its analysis is somehow flawed. That leads to the reality in western Canada that the Wheat Board is becoming less than viable. We talk about its not being cost effective and not being cost efficient, and it is losing market share. Any one of us who lives there can say this, and the numbers will bear this out, that it does not have the acres signed over to wheat, durum and barley that it used to have, simply because farmers are making the move into other crops, such as pulse crops and canola, which have become world class, developed right out of the western provinces, for that matter.

Farmers are not scared about marketing those products themselves. They have done well. As I said, they built world-class products to do that.

At committee today I heard the Wheat Board itself allude to the fact that there are some real problems with its voters list. We saw that in the last election. There are a tremendous number of voters who produce absolutely nothing and still have access to a ballot. There are another 42%, some 84,000 voters who are on that list, who produce less than what would come off of one field, less than a B train of product. Twenty per cent of the farmers control 80% of the votes, and that is an untenable situation. We will seek to rectify that.

[France Bonsant, Bloc, Compton—Stanstead, QC]

Mr. Chair, a rather unusual situation has arisen in my riding. A weather station in Stanstead is managed by Agriculture and Agri-Food Canada as well as by the organization responsible for agricultural insurance in Canada. However, it is included in Environment Canada's budget. This station is used to take hydrometry readings for hay fields.

Two years ago, we had a great deal of rain and many farmers lost their hay crops. When farmers applied for compensation to the appropriate organization in Canada, only one person was refused. The problem was that she lived next door to a neighbour who had a fence and the weather station covers a certain area. When the Financière agricole du Québec went to check out this situation, it found that the weather station was in a stand of maples. The hydrometer could not measure the amount of rain because the station was tucked away among the maples.

Everyone, except for that lady, was reimbursed or compensated. Since the equipment is not in the right place and is hidden in a building, will the minister move this weather station and then be able to provide fair compensation for hay producers?

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Mr. Chair, that is an interesting situation. If the member for Compton—Stanstead wants to give me the particulars, certainly we will look into it.

The member will know that what she is talking about is crop insurance. The lady was not covered because they said it did not rain where she said it did. That happens every once in a while, and we seek to rectify those situations.

The member will also know that crop insurance is a joint situation. There is the federal government, the provincial government, and the farmers themselves.

Certainly if she wants to give me the particulars, we will seek to rectify that. I look forward to that.

[France Bonsant, Bloc, Compton—Stanstead, QC]

Mr. Chair, the lady in question will be pleased with this answer because she has been seeking compensation for two years. The federal authorities and the Financière agricole du Québec have always been at loggerheads. Everyone passes the buck and no one wants to deal with the problem. I thank the minister, as we will now solve the problem.

The minister spoke earlier about products with 98% Canadian content. When I was on the committee, even though I am not a farmer, I asked the chair whether sugar cane is grown in Canada. She answered that all sugar is imported from Cuba. The minister tells me that there is sugar in Alberta. I hope it is not oil sands sugar. She told me that sugar cane is not grown in Canada. That is why the 98% rule is not acceptable. I remember that in committee even the Conservatives voted for the 85% rule.

Why stubbornly refuse to accept the 85% rule, as recommended in committee, rather than the 98% rule?

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Mr. Chair, I thank the member opposite for the intervention.

Certainly there is sugar grown in Alberta. It is sugar beets; and refined down, it is white sugar. It is very similar.

The lady from the organization that the member is talking about was correct that there is no sugar cane grown here, but there are other substitutes out there and I would certainly ask them to entertain those.

The option of 85% certainly was considered, but what consumers were asking for was more than that. Processors will always say that it is too much, but it is the consumers we were addressing with this particular one. Consumers, on the other end of the scale, are saying that is where they want to go; that is the number that should be there. The 98% allows for spices, sugar, salt and all those other things.

We even produce salt in this country. Anybody who says they have to import salt is wrong, as well. The only mine I have in my area is a salt mine. They flood down into a salt deposit, bring it up, dry it, and so on. It is Sifto salt, a world-recognized name. It is actually in my riding.

So there are salts, sugars and other capacities in Canada to address that 98%. We have had a tremendous response from consumer groups and from farmers themselves saying this is where they want to be.

Certainly there are going to be naysayers from the processing side. We will work with them on a case-by-case basis to make sure that they have access to the—

[The Chair, Conservative, Andrew Scheer]

The hon. member for Compton—Stanstead.

[France Bonsant, Bloc, Compton—Stanstead, QC]

Mr. Chair, we must not be talking to the same producers. Local producers involved in secondary and tertiary transformation are not in favour of the 98% rule. They say that, with such a high cut-off, they have no reason to use Canadian products. It is a vicious circle. If they have to buy cheaper products from outside Canada, that affects Canada's entire agricultural economy.

Is the minister aware that these regulations that are supposed to support Canadian products will do exactly the opposite? Has he considered that from the perspective of the Canadian and Quebec economy?

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Mr. Chair, the product of Canada label is a tremendous marketing tool, because everybody knows a Canadian product is safe. But there are a number of other ways to assess that.

We had some discussions with processors. I cannot divulge who they were, but they gave me an example of a product made with 100% Canadian potatoes. The label does not say “Product of Canada”, but it does say “100% Canadian potatoes”, splashed across it. That is what they worked with if they could not hit the 98%. It is a tremendous opportunity to do that.

There is also backing down to what is reprocessed. The member's colleague raised the issue one day in the House. He talked about importing cocoa beans and sugar to make a product and putting Quebec blueberries in it, but he could not call it a product of Canada. We do not grow cocoa beans here, so that is a problem to begin with.

One could say, “Good quality Quebec blueberries”--

[The Chair, Conservative, Andrew Scheer]

Order, please. I am going to try to be equal with the time as much as I can.

The hon. member for Compton—Stanstead.

[France Bonsant, Bloc, Compton—Stanstead, QC]

Mr. Chair, I will have to ask longer questions so that he has enough time to respond properly.

I would like to return to the issue of specified risk materials. Earlier, we were talking about Colbex and $50 million for slaughterhouses. In my riding, the loveliest in the world, there is a rabbit producer who has to drive 12 hours in his truck to have his rabbits slaughtered. When they get there, they are stressed out and their fur is standing on end.

Does the minister think it makes sense to have to drive that many kilometres to slaughter rabbits when $50 million has been promised to renovate, refurbish and build new Colbexes? If we do not have the facilities to slaughter these animals, will we not become more and more dependent on the United States?

I am a strong advocate of food sovereignty. I think that if we want to work toward food sovereignty, we have to look to ourselves, not our neighbours.

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Mr. Chair, I absolutely agree. Country of origin labelling is driving the need for more processing capacity here in this country. We have started to address that. If we find that there is tremendous uptake, I will go back to cabinet and argue that it should be expanded. I am more than prepared to do that.

I am not sure of the issue the member is talking about with respect to rabbits having to travel 12 hours. Is this to get to a federally inspected plant as opposed to a provincial plant, so that they can be exported? Certainly that is a factor. The market will drive that.

If there is a demand for rabbit, the program that we have will allow the provincially inspected plant to upgrade to a federal plant. It can make an application under the slaughter-capacity program that we are just bringing out.