Debates of Oct. 19th, 2011

Marketing Freedom for Grain Farmers Act

[Gerry Ritz, Conservative, Minister of Agriculture and Agri-Food and Minister for the Canadian Wheat Board]

moved that Bill C-18, An Act to reorganize the Canadian Wheat Board and to make consequential and related amendments to certain Acts, be read the second time and referred to a committee.

Mr. Speaker, I welcome this opportunity on behalf of western Canadian farmers to open debate on the bill that we are putting before the House that would give them marketing freedom very similar to what farmers have been enjoying in Ontario already for some years.

The Government of Canada, under the strong leadership of Prime Minister Stephen Harper, is very proud to be leading the way toward a bright future for Canadian farmers and for the overall Canadian economy--

[The Deputy Speaker, NDP, Denise Savoie]

Order, please. I am sure the hon. minister will want to refrain from using the name of sitting members.

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

Madam Speaker, we are just so darned proud of him but I will say the Prime Minister.

We believe that all Canadian farmers should be able to position their businesses to capture the marketing opportunities that will be open to them. We live in a free country and giving farmers the freedom to choose is the right thing to do.

Currently, by law, western Canadian wheat, durum and barley growers do not have the same rights as other producers in Canada about where and how they sell their products. For export or domestic human consumption, they have no other option but to market through the Canadian Wheat Board, the monopoly that was established in 1943 by an order in council, not by producers or for producers at that time.

By allowing marketing freedom, western wheat and barley growers will be able to market based on what is best for their own bottom line of their own business. In the June 2011 Speech from the Throne, we again stated our commitment to ensure that western farmers would have the freedom to sell wheat and barley on the open market. With this proposed legislation, we would provide marketing choice to western grain farmers once and for all.

To avoid market disruption, the goal is for farmers and grain marketers, including the new entity, to be able to start forward contracting in January 2012. Farmers, grain companies and customers need this assurance. As we well know, market certainty and clarity underpins stability in the marketplace domestically and internationally.

The bill would remove the monopoly of the Canadian Wheat Board and allow for the new Canadian wheat board to continue as a voluntary marketing organization for up to five years as it makes the transition to full private entity. During the transition period, this new voluntary organization would still be called the Canadian wheat board. It would continue to offer farmers the option of pooling their crops. It would continue to benefit from a borrowing guarantee backed by the federal government and it would develop a business plan for privatization, which will be reviewed no later than 2016.

This new freedom is not only good for farmers, it also has many economic benefits for communities across western Canada. New processing plants would be able to open their doors for business and look to hire new employees unfettered by the current ridiculous requirement to buy wheat and barley only from the Canadian Wheat Board.

Canada's grain industry is a powerhouse that brings $16 billion to the farm gate and makes up almost half of our agricultural exports. What was once Canada's signature crop, hard red spring wheat, has fallen behind. Wheat and barley innovation has become stagnate. Competition for acres has weakened and newer crops, such as canola, have surpassed wheat in value.

A C.D. Howe report released this past spring confirmed that Canada's share of annual worldwide wheat production has fallen by 50% in the last 50 years. It is a staggering number. Equally, Canadian market share and world barley exports have declined by 40% since the 1980s. With the reduced market share, the Canadian Wheat Board has less influence on the world stage and, as a result, has become a price taker.

We have seen tremendous growth in value added opportunities across the Prairies over the past 20 years for crops that do not have a monopoly marketer, including oats, pulses, flax and, of course, canola. We would see these same opportunities open up for wheat and barley as we implement market freedom. We will work with farmers and industry to attract investment, encourage innovation, create value added jobs and build an overall stronger economy.

Our government has promised western Canadian wheat and barley growers that they will be given marketing freedom. We are fulfilling that commitment and ensuring that the market is finally controlled by the experts in the grain industry, our farmers.

The Canadian Wheat Board was first imposed on western Canadian farmers when times were different, to say the very least, difficult. Canadians had just gone through the Great Depression, World War II was raging and Canada was committed to supplying wheat to Britain. It was 1943 when farmers were forced to sell through the board. It was done with the aim of aiding the war effort, not with any pretense that it would be good for farmers.

So what has changed since then? Just about everything down on the farm.

For starters, it is now 2011, not 1943. Our government remains focused on economic stability and creating the right conditions for more long-term jobs and stronger economic growth, all the while steadily eliminating the deficit and returning to surplus. Our workforce is healthy and our agricultural industry is helping to drive our economy.

Unfortunately, the one thing that has not changed is that prairie farmers are still forced by law to sell their wheat, durum and barley through the Canadian Wheat Board.

The government's position is clear: our long-standing commitment that we are now delivering on is to promise and provide marketing choice. This is why we want to continue to have the Canadian Wheat Board in place as a choice for those who want to continue marketing through the board.

For too long, barley and durum processors have been setting up shop south of the border because they could not take the red tape here in Canada.

Those who are looking for an economic analysis need only listen to the Canadian Chamber of Commerce when it says:

The current single-desk model restricts valued added investment in wheat and barley, significantly detracting the ability of farmers and industry to respond to market demands and earn a premium return in recognition of the innovation provided, including innovation in value-added processing.

That is quite a statement.

Look at what happened to oats when it came out from under the monopoly. In Manitoba alone the acreage of oats has increased by over 250,000 acres since its removal from the Wheat Board's control.

This has allowed for the opening and expansion of Can-oat, a processing mill in Portage La Prairie. A half a million tonnes a year of oats run through that facility. These are the types of value-added industries and jobs that exist when farmers have the option to market their products as they so choose.

The transition to marketing freedom will have an impact on the Port of Churchill, since the CWB was responsible for nearly 90% of all goods shipped through the port in 2010. Our government is taking concrete steps to help ensure the Port of Churchill will remain a viable option for exports.

The Government of Canada remains committed to Churchill, and we understand the importance of economic development and diversification to the community, the region and the overall north.

The government also acknowledges that the changes to the Canadian Wheat Board, while giving farmers marketing freedom, will also lead to a period of adjustment for Churchill and the surrounding region. That is why we are taking necessary steps to support the community and the port through this transition.

The government will provide an economic incentive of up to $5 million per year during the five year transition period to support shipments of grain, including now oil seeds, pulses and special crops through the port.

Working with the port owner, Transport Canada will invest more than $4 million to repair the existing port assets and support the safe docking of vessels. This will also enable the port to remain in sound operating condition to take advantage of future business opportunities, and could create jobs resulting in economic benefits to the community over the next three years.

Western Economic Diversification Canada will work with the Churchill Gateway Development Corporation on port infrastructure improvements, and extend the project completion date an additional two years, from 2013 to 2015. Additionally, the government will continue to explore initiatives to support the ongoing operations of the port.

We recognize that this is a major change for agriculture in western Canada. That is why we have been consulting extensively with stakeholders from across the supply chain, from the farm gate to seaport.

Over the summer, a working group comprising experts in the field heard a broad range of advice on how the grain marketing and transportation system could transition from the current CWB-run system to an open market that includes voluntary marketing pools.

The working group's report covers a wide range of issues from transportation to research to elevators, basically the how of moving to an open market. The basic thrust is to let markets work, but monitor them to ensure that effective competition prevails. The working group is one of many ways the government is seeking advice on how to move forward.

One of its recommendation deals with the issue of the advance payments program. This is a very popular tool farmers use to maintain their cash flow during the production season. The APP has always been delivered on behalf of Agriculture Canada by delivery agents. In order for the new CWB to focus 100% on the marketing of grain for those farmers who choose to use it, the Canadian Canola Grower Association will now administer the APP for wheat and barley, starting with the spring 2012 advance program. Canadian canola growers have great expertise and 30 years experience in administering these cash advances.

As a result of the change, many farmers will have their administrative burden reduced as they deal with fewer organizations, not to mention a potential reduction in their administration fee. Wheat and barley farmers will continue to have access to this program without disruption.

Canada's wheat and barley producers constantly adapt their operations to the evolving economic and weather realities, and their ability to secure cash flows is an essential part of their ongoing business decisions. Our government is taking clear and concise action so that wheat and barley farmers will continue to have access to the advance payments program during and after this transition to an open market.

With regard to the issue of producer cars, the reality is that the board's monopoly has never provided producer cars. The right to producer cars is set out in the Canada Grain Act, and producer cars have always been allocated by the Canadian Grain Commission, and the Wheat Board's only role was to charge a fee for the use of a producer car. Our government will continue to protect farmers' access to them.

Similarly, the fact is that short line railways and farmer-owned inland terminals succeed in their businesses on the basis of their management skills and the value they offer producers. They will continue to offer savings to farmers without the CWB monopoly. To suggest that they depend on a monopoly, forcing farmers to deal with them, is an insult to the people who operate these businesses.

These same groups offer professional and economically beneficial services to producers for non-board crops now, and they are doing very well at it.

The government is committed to improving rail service for agricultural shippers. The government completed the rail service review and we announced our follow-up actions in the spring of last year.

As for jobs, while the board will see some job losses initially, the future for employment in the grains sectors looks bright. We can expect more processors to start up new businesses in western Canada. Private marketers of wheat and barley will expand their workforces. The Western Grain Elevator Association members are already calling for and interviewing people to handle the increase it expects. Some have even committed to numbers that they will require in this new free setting.

Milling firms will be able to purchase directly from the farmer of their choice at a price and a timeframe they negotiate. Entrepreneurs will have the option of starting up their own specialty flour mills, malting and pasta plants. In fact, just recently, we had the honour of turning the sod on a new pasta plant in Regina. Murad Al-Katib of Alliance Grain Traders, born and raised in Davidson, Saskatchewan, has been selling Canadian pulses worldwide. The company also manufactures pasta in Turkey, but has stayed out of the Canadian market because of the monopoly and all the red tape involved in dealing directly with durum producers. This is a $50 million private sector investment that will create 60 permanent jobs and 200 construction jobs. He is unequivocal in saying that this would not happen without these changes. That is great news for Saskatchewan and it is great news for farmers overall. I know that there are more to come.

My colleagues on the opposite side of the floor unfortunately remain steadfast against these opportunities of an open market. Even more amazing about this opposition is that only a tiny fraction of their members represent anyone in the Wheat Board area. All of them are from city ridings. The official agriculture critics, both from Ontario, seem to think that they have the right to tell western grain farmers that they do not have the right to market their own wheat and barley as their own constituents do.

In the Ontario example, we made the announcement yesterday at Don Kenny of Blondehead Farms. He is the chair of the Ontario grain producers. We also had in attendance, Barry Senft, who is the president and CEO of the Ontario wheat board. They both recommend this change. They did it in 2003 and have never looked back.

My colleagues understand we are turning a page in our nation's great history and we will all be better for it. Exciting new opportunities lie ahead for our grain industry. The government is pleased to receive the support of this initiative from three of the four provinces shackled by the monopoly. Saskatchewan, Alberta and British Columbia produce over 90% of western Canada's wheat, durum and barley.

The agriculture minister from Saskatchewan said:

Saskatchewan farmers spend their own hard-earned money on land, machinery and inputs to grow their own crops, so why shouldn't they have the marketing freedom to decide how, when, and to whom they sell their grain?

Alberta's agriculture and rural development minister said:

Marketing opportunities are being lost every day and it's vital that Alberta's grain producers be able to market their product to anyone they choose.

As well, the agriculture minister for British Columbia said:

Every farmer in Western Canada deserves the right to sell their grain when, to whom and for the price that works best for their farm business.

The government is giving western Canadian farmers nothing more than their right to manage their own businesses their own way. While we welcome constructive debate, frivolous delays will only hurt our farmers and the overall grain industry.

We owe it to producers to provide market certainty so they can continue to plan their businesses. Farmers must plan for the 2012-2013 year. They are already putting inputs in the ground, getting ready. When they are making seeding decisions they will want to know what the marketing system will be for that 2012 crop.

Canada will continue to sell wheat and barley and maintain its reputation as a quality, reliable supplier. The international grain trade works largely on forward contracting for future purchases and sales. If there is uncertainty in the market about the rules of who can sell Canadian wheat and barley, there is a high risk that buyers will turn to other countries to buy that wheat and barley.

The Canadian wheat and barley sector can continue to supply domestic and world markets with high quality wheat and barley, but they look to us to provide the certainty they need to plan and carry out their business decisions.

I invite my colleagues in the House to join us as we work to ensure that all farmers across Canada can position their businesses to capture the opportunities of the future.

[Pat Martin, NDP, Winnipeg Centre, MB]

Madam Speaker, I have a number of questions for the minister because there has been such a preponderance of misinformation circulated by him and his office that some of it begs for clarity in this brief opportunity we have to debate this staggeringly complicated change he is making to the rural prairie economy.

First, I would like to ask the minister if he would clarify what he meant yesterday when he said that he has never seen a report from the CWB. At least on television he would have the public believe that the Canadian Wheat Board would not submit reports to the minister, as it is required to do. I know that I have seen the reports and I wonder why the minister has not or if he wants to correct the statement that he made.

Second, I know that when legislation goes through the process of development, a cost analysis is done to any piece of legislation, no matter what it is, and presented to the Treasury Board. We have never seen any cost benefit analysis of this piece of legislation. He owes it to Parliament and the general public to take this opportunity to tell us the cost implications.

Finally, in the same vein of costing, we have seen a private independent estimate by Peat Marwick that it would cost as much as $500 million in closing costs to terminate the CWB. A $6 billion a year corporation does not just disappear without significant closing costs. Contracts may be terminated and the contracts for ships that are being partly built may be terminated.

Will he tell us the government's estimate? What is it going to cost the government to destroy the Canadian Wheat Board? I would like answers to the other two questions as well.

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

Madam Speaker, I stand behind my statement that I have never seen the reports that I have asked for from the Canadian Wheat Board. It is supposed to, on a monthly basis, report to the minister of the day on what it has sold, who it has sold it to, the value of the sale, the shipping, and all of the transactions. I have never seen those. It does not seem to be able to provide those in a way that says it is getting a premium price. I have never seen those. Maybe the member opposite has an inside track, being the eager beaver that he is, but I have never seen them.

As to cost analysis, the member opposite talked about misinformation and that it has to be presented, and that type of thing. Farmers have done the cost analysis for years. As I said in my opening remarks, we have lost 50% of our wheat and 40% of our barley. What is the cost of that loss out there on the world market?

The one good thing the board has done in its intransigence is allowed for world-class canola, mustard, flax and oats. All the other commodities outside of the board have flourished. We are seeing processing, global demand increase and new varieties being developed. There is a great cost benefit in that the board not moving as it should has benefited the other sectors, to the point where now canola is king on the Prairies and will continue to be. We have crushing facilities. The misnomer that one cannot process at point of production and it has to be done at point of sale is put to the lie by the canola crushers that are popping up across the Prairies. We are also seeing the durum plant going in Regina. I know the member for Wascana will be celebrating that because a lot of those people live in his riding.

The member talked about the study that was done. It was KPMG, actually, and not Peat Marwick. The numbers I have seen on that one are so staggering in scope as to be unbelievable in the spread on some of them. He talked about the ships. There was no consultation with farmers on that. They are scooping money out of the farm pools without even asking farmers if they can do it. That is ridiculous. That is one of the reasons farmers have moved away.

[Frank Valeriote, Liberal, Guelph, ON]

Madam Speaker, I have two questions for the minister, but I would first request that he resist belittling the efforts of urban members of Parliament who know where their food comes from. We know that food comes from farmers and we are here defending the well-being of western Canadian farmers.

My two questions are as follows, very quickly. We know that he does not respect the opinion of opposition members and we know he does not respect the opinion of farmers who have expressed it in a plebiscite. Would he respect an objective opinion from The Economist magazine that said recently:

Smaller producers, faced with mounting marketing costs, will inevitably have to sell their farms to bigger rivals or agribusiness companies...devastating small prairie towns, whose economies depend on individual farmers with disposable income.

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

Madam Speaker, what I find to be hypocritical is that the member from Ontario, and good for him that he was elected, wants to deny my farmers the same rights and privileges that his farmers enjoy now. How can he stand in his place and do that? This is about fairness.

When he talks about the smaller producers who are in jeopardy, I make the argument that they will be in jeopardy if we continue down this line. These same small producers have become experts at marketing their canola, mustard, oats and flax. They have moved to other commodities. Certainly, they grow wheat because in the west we are using a zero-till process and need good rotational crops to fight the weed systems, chemicals and the like that are in the soil. That is great. However, we are not using wheat, durum and barley to the same extent that we used to. Now we are using triticale, canaryseed and many other products to fill the gap because of the intransigence and the changes that have not been allowed regarding the western Canadian Wheat Board. That is one of the reasons we are moving.

[Randy Hoback, Conservative, Prince Albert, SK]

Madam Speaker, this is obviously a great day for Canadian farmers. I am so excited. I want to thank the minister and the parliamentary secretary for all of their hard work. On this day I think of men like Rick Strankman, Jim Ness and the late Art Walde and all the battles they have fought.

Would the minister explain what options and opportunities the farmers will have once the legislation is passed?

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

Madam Speaker, like me, the member's background is in agriculture and his heart and passion are still there.

This issue is what has brought many of us to the floor of the House of Commons to ensure that we move forward.

Art Walde, whose name the member mentioned, was a good friend of mine. I attended Art's funeral. This was Art's lifeblood. His family insisted that I continue on with this fight and move forward on this issue to ensure that his son who is now farming would have the opportunity to run his own business in his own way and sell his own commodities.

We will get that done.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Madam Speaker, I heard the minister in the House and in the media last night say that the government is speaking for Canadians and Canadian farmers.

What I find puzzling is that when I spoke to the prairie agricultural associations, I heard something different. For example, the Agricultural Producers Association of Saskatchewan is dead set against shutting down the Wheat Board and is absolutely appalled that the government did not uphold the majority vote of farmers. It stated:

Producers have now sent a very clear message to government....So if government chooses to ignore the message and we do see the loss of the single desk, we’re concerned about the transitional issues that will result.

The Wild Rose Agricultural Producers of Alberta, Alberta's largest producer-funded general farm organization, is expressing strong opposition to shutting down the Wheat Board. The Canadian Federation of Agriculture is expressing strong opposition to the shutting down of the Wheat Board. The National Farmers Union, which has been in existence for many years in this country, is opposing this move by the government.

Who exactly is the government representing?

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

Madam Speaker, it is unfortunate the member has not broadened that scope to the real farmers in western Canada. The western wheat and barley growers, the Grain Growers of Canada and the Canadian Cattlemen's Association all support this initiative that we are moving forward on. As I outlined in my remarks earlier, so do the provincial governments, such as British Columbia because of the Peace River area, Alberta and Saskatchewan, where 85% to 90% of the Canadian Wheat Board commodities are grown.

Manitoba is against it. That is because of the NDP philosophy that we should all be locked into mediocrity; nobody moves, nobody gets hurt.

We are beyond that. These farmers know how to run their businesses. They are looking forward to their marketing freedom. We will get it done.

[Pat Martin, NDP, Winnipeg Centre, MB]

Madam Speaker, I thank the House for this opportunity to speak at second reading of Bill C-18.

The bill is a mistake in the making. We are watching a terrible economic mistake unfold before our very eyes. I must admit that there is a feeling of helplessness on this side because the Conservatives have chosen to use their majority to ram this change through to the rural prairie economic base without even consulting with farmers or allowing them the vote that they are guaranteed through legislation.

I preface my remarks by correcting one thing. The minister would have us believe that the May 2, 2011 general election was a referendum on the future of the Wheat Board. He would also have us believe that by virtue of the fact that the election was won by a majority it satisfies the condition of the Wheat Board legislation that guarantees farmers the right to vote on the future of the Wheat Board. I categorically reject that point of view.

I received telephone calls from prairie farmers in Saskatchewan and Manitoba who told me they had voted Conservative because of some other aspect they liked about the Conservative Party platform, which is their right to do. They also said that just because they elected that government it did not give the Conservatives the right to abolish the Wheat Board. They had understood that through the legislation they had been promised an opportunity to vote on it.

The minister has denied farmers the right to vote on how they would market their grain in the future. Therefore, when the minister stands and says he is giving farmers more marketing choice, if he is serious about letting farmers choose how to market their grain, why in God's name will he not let them vote on the issue? It is their democratic right.

If the minister is confident and believes his own rhetoric that the world would be a better place for farmers if they did away with the single desk monopoly of the Wheat Board, then why will he not put it to farmers for a vote? He claims he has the support of the majority of farmers on this issue. Why is he afraid of putting it to a democratic vote?

There has only been one genuine consultation with farmers on this issue. In the absence of a vote being sponsored by the government, the Canadian Wheat Board hired an independent third party and undertook a properly constructed vote using a fair question and fair methodology. As a result, 22,000 Canadian prairie grain farmers voted in favour of keeping the single desk monopoly. That is 62% of prairie grain producers. I was disappointed as I thought the numbers would be higher. We had estimated that about 75% of prairie grain producers supported the single desk monopoly. Nonetheless, 62% is a clear majority on that question.

There is no other form of consultation that is fair. The minister said that when he goes home and talks to farmers they tell him that they want to get rid of the Wheat Board. That does not constitute a scientific survey of the opinions of prairie farmers.

There is no business case for abolishing the Canadian Wheat Board. If there were it would have been tabled in the House along with the legislation. We are dealing with a notion here. We are dealing with the personal opinion of the Minister of Agriculture, who believes that we should abolish the single desk monopoly. I have empirical evidence to show that his view is that of the minority.

I also have well-documented and independently analyzed empirical evidence which shows that the Canadian Wheat Board has provided the best possible price for Canadian farmers year after year. As well, it has minimized their risks. It has provided both of those functions and many others which I will discuss if time permits.

The minister talked about offering farmers certainty, stability and clarity over the next farming year. In actual fact he is being reckless and irresponsible. At a time of economic uncertainty within the country, he is turning the rural prairie economy upside down on its head. There is no guarantee or certainty that the next farming year will provide a stable marketplace for grain farmers' products. There would be no underwriting and guarantees which are presently associated with the Wheat Board on pricing, on shipping capacity and on marketing capacity. All of that is now up in the air.

The minister would have us believe that farmers were better off in the 1920s when they were being gouged by the robber barons and the railway barons. The very reason farmers pooled together to act collectively was to protect themselves from the abuse of the powers that be, those people who held power over the farmers. That is how the Wheat Board evolved. That is how it graduated to being the largest and most successful grain marketing company in the world. It is a great Canadian institution wholly owned and operated by Canadian farmers. It is a brilliant concept.

It works so well that it irritates the heck out of our American neighbours. For years they have been trying to destroy the Canadian Wheat Board because they know it is a huge advantage for Canadian farmers, so much so that they claim it constitutes an unfair trading subsidy and violates international trade agreements. The U.S. filed 13 separate complaints first with the GATT and then with its successor the WTO. The WTO ruled 13 times that there is nothing unfair about Canadian farmers acting collectively to sell their products and look out for their own interests by commanding the best possible prices.

It is hard enough being a farmer with the droughts, floods, pestilence and all the other challenges farmers face. That is now coupled with the economic uncertainty of the 2011 Canadian economy. It boggles my mind that the minister would follow his own ideology, in spite of the empirical evidence to the contrary, and would throw this spanner into the economy of the three prairie provinces.

It worries me when ideology trumps reason, logic, economics, research and empirical evidence. It is a terrible thing to be setting policy by the notions of a failed ostrich rider. The man does not speak from any authority as a grain farmer; he raises ostriches in North Battleford. He criticizes my colleague for being from the good city of Guelph. He criticizes me for living in the good city of Winnipeg. Only he is being driven by this notion, which is a weak notion at that.

There is a great deal of collateral damage associated with the dismantling of the Canadian Wheat Board. The downtown area of Winnipeg that I represent has become the world centre of excellence for grain. That is not only because of its marketing capacity. It is a $6 billion a year corporation, the head office of which is in my riding. It ships 20 million tonnes of class A, the best grain in the world, from Canada.

It has also created the Canadian International Grains Institute, a satellite campus of grain excellence that does research and development funded by the Canadian Wheat Board. It develops and customizes new strains and product lines to fit the markets where the Wheat Board promotes our grain. The Canadian Grain Commission sets the grain quality standards so that we can continue to enjoy our reputation for having the highest quality grain in the world.

All of that will be lost. We will no longer be the centre of excellence. The big grain companies and private grain companies came Winnipeg because it is the centre of excellence and set up their headquarters next to the Canadian Wheat Board. They will no longer need to keep their head offices in Canada once the Wheat Board disappears, which it will because this notion of a voluntary wheat board with dual marketing is a pure chimera. It is a myth.

As a diversion, I will tell the House why it is plainly a myth. If the initial price for grain offered by a voluntary wheat board was higher than the market price there would be no orders. People would go to the market for grain. If the initial price offered was lower than the market price, it would have all of the orders but would have to sell the grain at a loss. That is a recipe for bankruptcy. It is exactly what happened in Australia.

When Johnny Howard, our Prime Minister's Australian counterpart, had the same brain fart of an idea that the Australian wheat board should be privatized. It lasted exactly three years as a voluntary board once its monopoly was taken away and it went bankrupt. Sure enough, that market share went into the hands of the private grain companies, the multinational agrifood businesses, which wanted to control the food supply system from seed to final retail production. They wanted it all. Believe me, they have been salivating over this market segment for 75 years.

The Conservative government is going to do the Americans' dirty work for them and hand them that market share on a silver platter, without any consideration of the best interests of the very grain producers who it is duty bound and honour bound to represent. It is amazing that the Canadian Wheat Board should finally crash because it has been sabotaged by the minister, a rat in the woodpile. The minister is undermining the very institution that he is honour bound by his office to uphold and be the champion of. He is not supposed to be the saboteur of the Wheat Board; he is supposed to be the champion of the Wheat Board. There is an enemy within. The Canadian farmers have elected an enemy.

The implications are profound for the prairie economy if the Canadian Wheat Board disappears.

I will dwell briefly on the economic impact just for the city of Winnipeg, because it is the area I represent. A PricewaterhouseCoopers study in 2005 estimated the gross output of the CWB impact in Winnipeg at $94.6 million. There are 400 employees in its head office. The spin-off employment of the CWB is estimated at more than 2,000 jobs. At the provincial level, the CWB gross output contribution is another $323 million, with more than 3,000 jobs of a total labour-income impact of more than $140 million. I cannot tell the members how frustrated we are.

I would like to deal with some of the corresponding collateral damage, as I am calling it. For the Port of Churchill, the minister has now come up with $5 million a year for five years to offset the impact on the Port of Churchill. I read that as an acknowledgement that the Wheat Board no longer shipping its grain through Churchill would have a profound impact. However, it begs the question of why he is so eager to abolish the Canadian Wheat Board when it will cost him a minimum of $25 million in impacts that the government otherwise would not have to shell out. It is money it does not have, I might had. It has to borrow every penny that it shovels into this.

As to the closing costs, I asked the minister this question. What would it cost to shut down a $6 billion a year corporation, the most successful and largest grain marketing company in the world? KPMG, an independent authority, estimated as much as $500 million. It would have to pay severance to all the employees. It would have to deal with contracts that had been signed for the delivery of grain, that now would be broken. It would have to dismantle overseas marketing offices.

The average layperson does not understand the marketing network we have established here. It is magnificent and that is why it is so successful. Now the government will borrow $500 million on the open market. I do not know where that kind of money is borrowed from these days. That is just to fulfill this free market flight of fancy of that minister who got into politics specifically to abolish the Canadian Wheat Board.

I remember when he was the assistant to Elwin Hermanson, whom the Conservatives have happily put in charge of the grain commission, again, infiltrating these organizations to destroy them and collapse them from within. The minister has breathed, eaten and slept abolishing the Canadian Wheat Board ever since he came to Ottawa. Now, in spite of reason, logic, economics and empirical evidence, he is hell-bound and determined to do the dirty deed and abolish what we believe is a great Canadian institution.

It would not be paranoid to presume that this is part of a pattern. Every time there is a trade advantage to Canada, those guys feel compelled to sacrifice it and give it up, such as the softwood lumber agreement. When the Americans came breathing down our necks telling us we were enjoying far too much advantage in that industry, we forfeited.

When it comes to the Wheat Board and when it becomes evident that we do it better, what do we do? We give it up and forfeit it. We yield to the bullies in an international trade situation and give up our advantage.

We do not have champions here; we have cowards in giving up so readily, and again, driven by ideology and not by anything else.

As I close, I would like to move an amendment. I move:

That the motion be amended by deleting all of the words after the word “That” and substituting the following:

“this House declines to give second reading to Bill C-18, an act to reorganize the Canadian Wheat Board and to make consequential and related amendments to certain acts, because it:

(a) fails to respect the will of the majority of prairie farmers who have expressed a desire to maintain the current composition and structure of the Canadian Wheat Board;

(b) ignores the fact that the Canadian Wheat Board is funded, controlled, and directed by Canadian farmers and removes their autonomy to maximize prices and minimize risks in the western wheat and barley market; and

(c) makes sweeping decisions on behalf of prairie farmers by eliminating the single-desk system that has provided prairie farmers with strength and stability for nearly 70 years.

[The Deputy Speaker, NDP, Denise Savoie]

The motion is in order.

Questions and comments, the hon. member for Guelph.

[Frank Valeriote, Liberal, Guelph, ON]

Madam Speaker, I have been on the Standing Committee on Agriculture and Agri-Food for three years now and wheat farmers have been before the committee on many occasions. We continually ask them, in their opinion, why manufacturers have not begun to build pasta plants out west. They say, almost unanimously, that they do not want to do this because of the distance from their markets, not because of the Canadian Wheat Board.

However, now that the Wheat Board is on its deathbed, they have said, through the Alliance Grain Traders Inc., only now will they open a pasta plant in Saskatchewan. In one of its reports it said, “Margin erosion is combated by negotiating lower prices from growers”.

Does the member believe the plant will go in there now because it knows it will pay less for its grain, and it will be at the expense of Canadian farmers? What delusion is the minister under to think farmers are going to do better by getting rid of the Wheat Board?

[Pat Martin, NDP, Winnipeg Centre, MB]

Madam Speaker, studies have indicated that abolishing the Canadian Wheat Board would take hundreds of millions of dollars out of the pockets of prairie producers and put them into the pockets of the shareholders of the private grain companies. People should remember that the Canadian Wheat Board is a non-profit organization. It is not even allowed to retain assets or income. All returns have to be returned to the producer. The profit margin will go to the big grain companies. In the case of this new pasta plant, it is salivating. It anticipates it will be able to get its grain cheaper, which means farmers will earn less.

While I am on my feet, let me also deal with an issue that the minister raised. He said that the only reason the pasta plant was being built was because the product would be value-added and that would happen more. In actual fact, in western Canada milling capacity has increased 11% from 2001 to 2011 and four new mills have been built in western Canada in 2011 compared to 10 years ago. Four new mills happened under the current situation, whereas in North Dakota there was not one new mill. In fact, the number of mills remained static.

Entrepreneurs could in fact add value to the raw product in Canada under the current system. The fact that they did not may be due to many reasons. However, the minister is misleading Canadians if he is saying that this is going to be a free market nirvana now and all of these mills are going to sprout out of the ground like mushrooms. It simply is not true.

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

Madam Speaker, one of the disadvantages both members opposite have is coming late to the discussion. I guess neither of them is aware of the failures of the pasta plant projects that tried to take place in western Canada, but were shut down because the Wheat Board would not allow producers to even use their own grain. It would not allow them to sell to the producers. I guess the member opposite did not know that.

We certainly would welcome a new pasta plant there. According to the logic of the Liberals, it would seem that we should shut down every factory in Canada if we want to protect the prices of our natural resources, which is ridiculous. I do not know where they are coming from in even making a suggestion like that.

I want to ask the member one thing. I talked to some Winnipeg-based businesses that do marketing for farmers in some of the specialty crops. They told me they had around 1,000 customers right now and they were absolutely thrilled that they would have the opportunity. They said that the problem for them would be accessing enough employees to do the work when moving from 1,000 to potentially 15,000 customers.

Why is he not prepared to support the Winnipeg businesses that really see this as an opportunity?

[Pat Martin, NDP, Winnipeg Centre, MB]

Madam Speaker, it gives me an opportunity to answer the question that the member should have asked, which is, What is going to happen to Canadian wheat as a commodity? I can answer that question for him. Canadian wheat, which has a reputation around the world as the highest quality and maintained as such by the work of the Canadian Wheat Board and its quality control, will be lost as a Canadian commodity because it will be blended.

When the big agrifood and grain companies take over and we sell our number one grade, fine quality Canadian wheat, it will be mixed with some substandard wheat from somewhere else in the United States and will be sold offshore that way. Our customers are going to lose their confidence in the Canadian product if we cannot maintain the highest standards that we currently enjoy and the reputation that we earned stemming from that.

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

Madam Speaker, last night some of us were here in a debate trying to support democracy in Ukraine. It seems ironic that we are now witnessing the erosion of democracy in our own country.

I have before me a communiqué from the Canadian Wheat Board Alliance, a non-partisan group, in support of the Canadian Wheat Board. It stated:

At a widely quoted election forum in Minnedosa, Manitoba, [the minister] said his party “respects the vote” of farmers who support the single desk and suggested there would not be any attempt to dismantle the Canadian Wheat Board unless a majority of producers vote for it.

He went on to say:

—until farmers make that change, I’m not prepared to work arbitrarily. They are absolutely right to believe in democracy. I do, too.

This was during the election. We get the spin that somehow, because many people voted for the Conservatives on the Prairies, this is the mandate. What about the fact that farmers are only 2% of the population spread over 57 western ridings? Claiming the Conservative Party has a mandate from farmers to change the Wheat Board is ridiculous. Most urban voters agree that farmers should decide this issue.

Would my colleague please comment on this?

[Pat Martin, NDP, Winnipeg Centre, MB]

Madam Speaker, if we take the Conservatives at their word that they want to give more marketing choice to farmers, why do they not let them vote on it as the legislation demands and as the minister promised farmers?

He is being disingenuous, which perhaps is too kind a word, when he says that all western farmers want to do away with the Canadian Wheat Board. He certainly was disingenuous with the people of that area, saying, “Go ahead and vote Conservative. It does not mean it is a referendum on the Wheat Board”. Then he stood up on May 2 and said that he got a referendum on the Wheat Board.

The only way to test the merits of the argument of the Conservatives is to put it to farmers and let them decide.

If, on a fair question and a democratic vote, farmers say they want to do away with the Wheat Board even by 51%, the government will not hear another word from me or my colleagues in the NDP. We would respect the democratic will of farmers, not ignore it and insult it the way the government has.

[Randy Hoback, Conservative, Prince Albert, SK]

Madam Speaker, this past summer supposedly the board sent out a plebiscite and it said it had 22,000 supporters. Would the hon. member tell me why it did not sign up acres in the 22,000 supporters? Could he explain to me why there is accredited exporters here in Ottawa saying they cannot source grain?

Why can the board not do both? Why can it not offer the grain from these 22,000 supporters to the people who are already marketing that grain on their behalf?

[Pat Martin, NDP, Winnipeg Centre, MB]

Madam Speaker, I do not think my colleague should challenge the merits or the veracity of the plebiscite that took place. It was done by an independent third party. I am trying to remember if it was KPMG or PricewaterhouseCoopers. It was a clear question, a fair question. We did not need any Clarity Act on the question: “Do you want to maintain the single desk monopoly?” A clear majority of farmers voted to keep it.

We have to respect that. If one calls oneself a democrat, one has to respect the democratic will of people as clearly expressed in a fair and honest vote.

The Conservatives may be unwilling to uphold their obligation to farmers to conduct a vote as per the legislation, but the Canadian Wheat Board had one and the results were clear. We have to respect that. It is all about respect.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Madam Speaker, the Conservatives have misrepresented in the House when they said that Ontario farmers had a choice. Ontario farmers were given a vote. Their markets were completely different. There is a much smaller market into the United States as opposed to the massive distances covered by prairie farmers.

Why is it the hon. member thinks that the government is opposed to allowing farmers the right to vote?

[Pat Martin, NDP, Winnipeg Centre, MB]

Madam Speaker, let me reiterate that if there were such a vote and the prairie farmers voted even by 51% or 50% plus one, that would be the last the House would hear about it from us.

If the farmers of Ontario voted to do away with the marketing system they had, that is their business; that is their right, just as it should be the right of prairie farmers to make that choice. It should not be arbitrarily imposed by a bunch of ideological zealots.

[The Deputy Speaker, NDP, Denise Savoie]

Before resuming debate, it is my duty, pursuant to Standing Order 38, to inform the House that the question to be raised tonight at the time of adjournment is as follows: the hon. member for Edmonton—Strathcona, Aboriginal Affairs.

[Frank Valeriote, Liberal, Guelph, ON]

Madam Speaker, we should not even be debating Bill C-18 today. Alongside tens of thousands of western Canadian farmers, members on this side of the House await the plebiscite the Conservative government is legally required to hold under section 47.1 of the Canadian Wheat Board Act before it can apply its ideological scalpel to a Canadian institution that has been the backbone of grain farming across the Prairies for decades.

Nevertheless, if we have learned anything from the behaviour of the government in the early days of this Parliament, it is that its ministers are rolling out the greatest hits of the Reform Party. Throwing caution to the wind, it is stifling debate as much as possible and taking the rest of Canada along with it no matter who it negatively impacts.

Neither the Prime Minister nor the Minister of Agriculture and Agri-Food has ever made much of a secret of their single-minded desire for the death of the single desk system. What they have kept from enquiring Canadians are the reasons they refuse to hold a plebiscite of the Wheat Board membership, or even why in March, heading into an election, the minister assured farmers that there was no reason to worry and that their opinions would be sought on the Wheat Board when it came forward in this Parliament.

Once it became clear that the minister had no intention of honouring his March pledge, the Canadian Wheat Board held its own plebiscite on the continued operation of the single desk under the Canadian Wheat Board. The results were clear. The majority of western Canadian grain farmers chose the stability, competitive advantage and clout, not just in Canada but overseas, that it enjoys due to its numbers brought together under a single desk.

In August 68,000 ballots were mailed out to farmers. Over the course of that month meetings were held across the Prairies and hundreds of farmers came in off the fields for meetings as harvest began simply to ensure their voices were heard. Farmers for both sides attended these meetings. They listened respectfully and made their points as to why they believed it should go or why it should stay.

I attended several of these meetings and was astonished, as were the organizers. Never before had they held a single meeting where over 500 farmers attended, such as the one in Saskatoon in early August. I set out to listen to the different viewpoints of various farmers and at one meeting was pulled aside by one farmer from the Saskatoon area. He said to me, and I will paraphrase because he used much more colourful language, “I haven't voted Liberal in the last thousand years and it's unlikely that I will in the next thousand years, but I certainly did not vote Conservative so that they could kill the Canadian Wheat Board”.

I may not have changed his vote, but what he wanted to ensure was that someone in Ottawa was listening to him. Sadly, he could not go to his own MP because just when farmers are asking them to listen and represent the farmers' best interests, Conservative MPs are nowhere to be seen or heard. Not one. Not one single Conservative prairie MP has the courage to stand up and defend the rights of his or her constituents to hold a government-conducted plebiscite as mandated by section 47.1 of the act.

The Conservative Party only received 24% of eligible Canadian votes, which certainly does not constitute a mandate to run roughshod over the democratic rights of farmers to maintain their livelihoods under the Canadian Wheat Board Act.

Desperate to have their voices heard, farmers held their own plebiscite. The results of the plebiscite were unambiguous with a 56% response rate, a number similar to the turnout in many recent general elections and byelections, including in the minister's own riding. Sixty-two per cent of wheat producers and 51% of barley producers voted to retain their single-desk marketing and sales arm under the Canadian Wheat Board.

Regrettably, the minister simply dismissed the results as an expensive survey. Unfortunately, Canadians do not have the same opportunity to dismiss their muzzled prairie MPs' own election results similarly.

Many argue that with the fragile state of the world economy, the CWB is more important than ever before for the grain-exporting prairie provinces. The livelihoods of Canadian farmers and small businesses are at stake.

Recently even The Economist wrote that, concerned about the death of the single desk marketing system:

Smaller producers, faced with mounting marketing costs, will inevitably have to sell their farms to bigger rivals or agribusiness companies....devastating small prairie towns, whose economies depend on individual farmers with disposable income.

I have heard from farmers, even some who favour killing the Wheat Board, that thousands of farms managed by farmers whose age exceeds the average age of farmers in Canada, which is 58 years, are likely to close. With their closure so too will the small town and village economies supported by those farmers suffer. We risk seeing an end to a number of small towns in rural parts of our prairie provinces.

The board markets and sells on behalf of every wheat and grain producer in the Prairies to some 70 countries and 100 buyers across the world. Its unique position allows it to act as a price setter instead of a price taker.

In contrast to The Economist, the Wall Street Journal welcomed the impending demise of the Canadian Wheat Board noting, “more money goes back to farmers than under an open-market system,” the open market system that the government is proposing. It went on to say:

Grain handlers such as Cargill Inc., Viterra Inc. and Bunge Ltd. could see their roles—and returns—in Canadian grain markets grow.

At whose expense? No one else other than our prairie wheat farmers. Recently in a report from Alliance Grain Traders Inc., which is conveniently only now opening a pasta plant in Saskatchewan, said its “margin erosion is combatted by negotiating lower prices from growers”.

From my time on the Standing Committee on Agriculture and Agri-Food, I have learned that a major reason that pasta manufacturing has not been meaningfully undertaken in the west is it is too far distant from a market that would consume its products and transportation costs would be too great.

Now that the Canadian Wheat Board will be abolished, there is the opportunity to get the lowest possible price for grain from farmers who are no longer able to set the best possible price that will allow pasta manufacturers to offset the transportation costs of marketing their pasta, again at the expense of western Canadian farmers.

What is clear is that the protection of the family farm in the prairie provinces is not a priority under the Conservative government. It would prefer to create an environment that would see farmers fail than support an environment that protects the way of life for multitudes of farmers and their families whose way of life will be dramatically changed and not for the better.

For whom will they be changed? For the well-being of large agribusiness and foreign interests. Without the Canadian Wheat Board which returns excess profits to the pockets of farmers, the larger rail and grain companies that can sustain their own networks will finally have access to those farmers' profits. Their interest is not the well-being of farmers, but rather their own bottom line. Farmers will be left to bid one another down to the lowest possible price to sell their grain.

We know not only from studies but intuitively that farmers will fall prey to the gluttonous appetites for profit of grain companies and the railways, appetites that have been held in check by a steady diet controlled by the Canadian Wheat Board. In the wake of the minister's pronouncements on the death of the CWB a month ago, shares in Viterra dramatically spiked.

Moreover, there have been no assurances made by the government regarding Canadian food sovereignty. It is one thing that small family farms will be bought up by massive agribusiness; it is entirely another to see Canadian farms expropriated by foreign interests not unlike the purchasing of our mineral rich lands out west, concerned more with their own national food security and not at all with Canadian food sovereignty.

It certainly does not help that just yesterday the United States took a backward step with buy America and unilaterally thickened the border in an effort to stimulate its own economy. Meanwhile the Canadian government is prepared to give itself a hernia removing all of the tools the Canadian wheat and barley producers rely on to protect their livelihood, including the Canadian Wheat Board.

The number one trade ask by Americans has always been to get rid of the Wheat Board because it gives our farmers a competitive advantage. Now with the Prime Minister as the head waiter and bottle washer to the Americans, we are preparing to hand them a huge agribusiness, their very request on a platter with absolutely nothing in return, not even a modest tip from a country which has shrugged its shoulders and wrapped itself in the shroud of American protectionism.

There have been 14 challenges to the World Trade Organization from the United States demanding that we get rid of the Canadian Wheat Board. In every instance, the WTO has ruled in our favour and allowed western grain producers to maintain their valuable resource.

Why are there challenges? It is because the Wheat Board gives our farmers a competitive advantage that is the envy of others around the world. We must make no mistake that once it is gone the provisions our trade agreements say that it can never be brought back. We would be foolish and naive to think that our supply managed industries, like chicken, dairy, eggs and turkey, are not already now being lined up in the sights of the government for their demise.

This is not about limiting choice for farmers. The CWB is in a unique position to market different qualities of grain at different times of the year to different markets through a board that knows it serves the diverse needs of many farmers. Its strength is in the fact that all farmers across the Prairies are in it together. Its elected directors are farmers, too. They understand what it is to sell and market grain, the best grain in the world.

Should this legislation pass, by reducing the number of directors from 10 elected and 5 appointed to simply 5 government appointed directors to the 5-year interim voluntary wheat board, the Conservative government would have it that only its own people, dictated to from the Prime Minister's office, speak to the multitude of farmers.

Overwhelmingly, in Wheat Board election after election, directors who support the single desk under the Wheat Board are returned. Farmers elect these directors and yet, once again, suppressing any sort of democratic expression, the government places a higher value on ideology than on the experience of farmers.

These are farmers who understand the virtue of saving $1,400 per producer car on transportation costs through the CWB's unique bargaining position, a savings that will be almost immediately lost. Presently, it is in a position to negotiate with CN and CP Rail to ensure the adequate supply of producer cars. This, too, will be lost.

One of the more substantial complaints from within the agricultural industry is that Canada is regarded as an unreliable supplier of agricultural products by virtue of the fact that it cannot get its supplies to port along the railway. In large part, this is a direct result of the ongoing disputes between suppliers and CN-CP Rail.

The agricultural industries anticipated that these concerns would be addressed in the rail service review tabled in March of this year. Meanwhile, seven months later, we are talking about stripping prairie farmers of transportation infrastructure while the government shelves yet another report.

The government has failed to appoint a facilitator in good time. It has failed to address the day-to-day logistical issues of shippers, like getting them the right number of cars and on time, and is telegraphing to the farmers, who will be affected by this in large part, farmers who do not have immediate access to the border, farmers who are not on the main line, that where once their concerns were difficult to address with the rail companies, now they will be almost impossible to address.

I have learned, through my discussion with the owners of Shortline Railways, that they will no longer be able to maintain their railways as they will no longer have the support of the Canadian Wheat Board once it is gone. The rest of the farmers will still not have any resolution along the main lines.

As it stands, hundreds of grain facilities have access to only one rail line and are held captive by either CP or CN, subject to their charges. Through the Canadian Wheat Board, farmers have had the clout to, as a unit, stand up to both CN and CP to get the best deal for their transportation costs possible.

In my conversations with western Canadian grain farmers, all too often I have heard tragic stories about the treatment of producers at the hands of the railways. The railway companies have such disregard for wheat farmers that often they will send railway cars with holes in them without any consideration for what grain will be lost along the way. Farmers, individually, are up against a behemoth, where once their collective clout enabled them recourse in the face of such poor treatment.

The government also refuses to acknowledge that there is a value added of $500 million annually in services provided by the Canadian Wheat Board in the form of critical weather analysis and research and development, as well as the transportation benefits. Even by using a network of over 800 weather stations located on farms across western provinces, the Canadian Wheat Board provides accurate, up-to-the-minute weather information, as well as grain research and innovation.

In a token offering in the legislation, the government is recommending a voluntary check-off to be applied toward grain research and innovation. What farmer will check off additional money for research and innovation while her or his profits are going go up in smoke? However, the government seems intent on spending money, estimated conservatively at almost $500 million, in a time when it claims that we are still in a fragile economic state, to demobilize an organization that has yet to require any federal funding. It has been farmer funded for farmer profits.

Forsaking billions of dollars in revenue with no sound replacement model is reckless. The government has made it clear that it will only listen to farmers so long as they are saying something the government wants to hear. Canadian farmers know what is in their own best interests and the government would do well to listen to their collective voice, not simply to the voices of the few who will be in a better position than the many to profit from the demise of the single desk system.

For our part, the Liberal Party entirely opposes this reckless, ideological legislation and finds no value in the feckless rhetoric of the minister and members content to vote like lemurs for the demise of a system that is still supported by the majority of its members.

I challenge the minister and the party opposite. If they are not afraid of the results of a plebiscite on the continued existence of the single desk system and if they truly feel that a majority of western Canadian farmers are on side with their prescription for the death of the Canadian Wheat Board, they should withdraw their legislation and hold their own plebiscite on the issue, as mandated by the very legislation they hope to destroy, the very legislation that western Canadian farmers hold so sacrosanct, that the necessity for democratic expression is enshrined within it to protect farmers from the very abuse that the Minister of Agriculture is currently perpetrating.

In closing, I move:

That the debate be now adjourned.