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House of Commons Hansard #33 of the 41st Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was grain.

Topics

Marketing Freedom for Grain Farmers ActGovernment Orders

5:20 p.m.

Conservative

Ray Boughen Conservative Palliser, SK

Mr. Speaker, in response to the hon. member's question, as the hon. member mentioned earlier, the Canadian Wheat Board is not a facilitating operation in terms of expansion, new ideas and innovative technologies. It is very cut and dried: “Bring your wheat. Here you go. Good-bye. See you.”

The new marketing ideas that young people have, the new formulas they have for growing crops, their interest in expanding and their creativity is not facilitated by the Canadian Wheat Board. It never has been and it probably never will be. That is why it is important that we put in place, as a government, an opportunity for young people to expand their expertise, to expand their growing seasons, to do different things with their crop rotation. We want them to be fully-fledged business people marketing their own goods, as they do now in grains such as canola, flax and oats. They market those grains themselves. This is not a new thing for people in the agricultural sector. It is just an expansion of what they are currently doing.

Marketing Freedom for Grain Farmers ActGovernment Orders

5:20 p.m.

NDP

Peggy Nash NDP Parkdale—High Park, ON

Mr. Speaker, I am pleased to rise today to speak to Bill C-18 and in support of the Canadian Wheat Board. The board is the largest and most prosperous grain marketing board in the world. It sells grain around the globe. It makes arrangements for shipping grain from thousands of farmers to consumers in over 70 countries. In an average year, the board puts some 21 million tonnes of wheat and barley on the market.

In addition, all profits from these sales, between $4 million and $7 million a year, are paid back entirely to farmers. The board does not hold on to any income, apart from what it needs to cover costs and manage the financial risks.

The board mitigates the risks run by farmers, particularly concerning late payments, selling grain to buyers at inappropriate times and shipping the grain to buyers. This is a key problem, considering the large geographic area of the Prairies.

Batch selling has also allowed farmers to have a significant influence on the handling and shipping of grain, and on international trade policies. The board works in partnership with the industry and the government to promote policies concerning trade, transport and other areas that benefit wheat and barley farmers in western Canada. The board has defended farmers remarkably well in cases of unfounded trade disputes and has won important victories that resulted in better fees and rail service.

The board's single desk structure has ensured financial stability, sound risk management and secure supply chains, an indisputable advantage for farmers.

Furthermore, the Canadian Wheat Board is not a government-funded agency or a crown corporation. The Canadian Wheat Board is not funded by Canadian taxpayers. Farmers pay for its operations from their grain revenue.

Ten of the 15 members of the board of directors of the Canadian Wheat Board are elected by farmers. Farmers consistently elect a majority of directors who support the single desk structure.

The Conservatives have no mandate to go against the wishes of prairie farmers. The Canadian Wheat Board is controlled, directed and funded by farmers. Farmers should be the ones to decide the future of the marketing organization that they run and they pay for.

They have made their decision clear. The results of the Canadian Wheat Board plebiscite released on September 12 show that a strong majority of farmers want to maintain their ability to market wheat and barley through a single desk system. Sixty-two per cent of respondents voted in favour of retaining the single desk for wheat, and 51% voted to retain it for barley. A total of 38,261 farmers submitted mail-in ballots in the plebiscite, a participation rate of 56%, on par with the last three federal elections and higher than many municipal and provincial elections.

Canada runs the risk of losing $200 million to $500 million a year in board price premiums.

The board manages a supply chain from gate to plate. It has an enviable international reputation for its quality and uninterrupted supply, its service and superior technical support.

Grain sales made under the exclusive jurisdiction of the board guarantee a secure supply of grain, thus guaranteeing strategic and orderly sales. This gives farmers a competitive advantage in the international grain market. On their own, farmers would have to sell by auction. They would have to decide whether or not to sell depending on the circumstances, a gamble that could cost them their farm.

In fact, many studies carried out by well-known agricultural economists, based on data compiled by the board, concluded that the single desk model allows Prairie farmers to bring in millions of dollars more per year than on the open market.

The dismantling of the single desk system will have a serious impact on communities across the Prairies. A 2005 economic impact analysis by PricewaterhouseCoopers found that the Canadian Wheat Board contributes a gross output of $94.6 million to the city of Winnipeg. In addition to its more than 400 employees at its head office, PricewaterhouseCoopers calculated spinoff employment from the Canadian Wheat Board to be more than 2,000 jobs, with a total labour force income impact on the city of more than $66 million. At the provincial level, PricewaterhouseCoopers put the Canadian Wheat Board's gross output contribution at $323 million with more than 3,000 jobs and a total labour income impact of more than $140 million.

The Conservatives have argued that the Ontario experience with removing the single desk can be applied to western farmers, but one cannot compare apples to oranges. The examples are completely different. Ontario wheat farmers produce wheat for pastries, cookies and cakes. They have a ready market available locally. In contrast, prairie wheat farmers produce hard red spring wheat which does not have an extensive local market. Ontario wheat farmers sell about 90% of their product within Canada and the northern U.S., but 80% of the wheat grown in western Canada each year is exported overseas. That means while Ontario farmers have low transportation distances and costs, prairie wheat farmers must pay freight costs to transport grain long distances to inland terminals and to port.

Of course, the other crucial difference between the Ontario experience and the measure being discussed here is Ontario wheat farmers ended their single desk system through a farmer-led democratic process. Prairie farmers have voted in favour of keeping the Canadian Wheat Board and face having it taken away against their will.

A better comparison can be found in Australia. Western grain farmers can look to Australia to know what is in store for them when the single desk is eradicated, and it is not pretty. When the Australian wheat board had its single desk power, wheat could command a premium of over $99 a tonne over the American wheat, but by December 2008, it had dropped to a discount of $27 a tonne below U.S. wheat. In three short years Australia's 40,000 wheat farmers went from running their own grain marketing system, virtually all of Australia's wheat, which was 12% of the world's wheat production worth $5 billion, selling it on their own behalf, to being mere customers of Cargill, one of the world's largest agribusiness corporations, which is privately owned and based in the United States.

Before making any changes to the board, the government must study the impact of its dismantling and analyze the effects this would have on Canadian grain farmers. Otherwise, it is playing Russian roulette with the Prairie economy and with the revenue sources of western farmers.

Allen Orberg, a farmer and chair of the Canadian Wheat Board's board of directors, has said that this government's imprudent approach will derail the Canadian grain industry. It threatens the future of a sector with $5 billion in exports every year. It will take money out of the pockets of Canadian farmers and give it to American corporations.

In closing, the important thing is to give farmers a say. They have voted. They want to keep the Wheat Board. It is incomprehensible that the government would override the democratic will of farmers and dismantle the Canadian Wheat Board.

Marketing Freedom for Grain Farmers ActGovernment Orders

5:30 p.m.

Conservative

Kyle Seeback Conservative Brampton West, ON

Madam Speaker, I do not come from a riding that has a great deal of farms. I come from an Ontario riding, so I do not necessarily understand the nuances or intricacies of the Wheat Board. What I do understand is basic economics. We continually hear from the members on the other side of the chamber that the Wheat Board is the greatest thing since sliced bread. If it is so great, then when it becomes optional for western farmers, there is going to be a stampede to stay with the Canadian Wheat Board.

I do not understand the logic that by making the best thing in the world optional is somehow going to lead to its demise. Perhaps the member opposite could correct me on how that logic is not correct.

Marketing Freedom for Grain Farmers ActGovernment Orders

5:30 p.m.

NDP

Peggy Nash NDP Parkdale—High Park, ON

Madam Speaker, it is simple. Democracy is the greatest thing since sliced bread and the democratic will of prairie farmers has not been respected, as it must be by law. The government is riding roughshod over a decision taken by prairie farmers who want to keep their Wheat Board. The government is saying that they are not going to have that option. The dismantling of the Wheat Board will have huge ramifications in terms of prices and the impact on our overall economy, but especially on prairie farmers. It is incomprehensible why the government would not abide by the law, respect the will of farmers and allow them to keep the Wheat Board.

Marketing Freedom for Grain Farmers ActGovernment Orders

5:30 p.m.

NDP

Alain Giguère NDP Marc-Aurèle-Fortin, QC

Madam Speaker, could my colleague tell us what impact the loss of an institution as important as the Canadian Wheat Board would have on our national sovereignty?

Marketing Freedom for Grain Farmers ActGovernment Orders

5:30 p.m.

NDP

Peggy Nash NDP Parkdale—High Park, ON

Madam Speaker, I thank my colleague for his question.

When Australia lost its equivalent of the Canadian Wheat Board, farmers lost control over their wheat. They became clients of a large American company. They lost control and became very dependent on that company, which led to loss of revenue and the destruction of that sector.

Marketing Freedom for Grain Farmers ActGovernment Orders

5:35 p.m.

Cypress Hills—Grasslands Saskatchewan

Conservative

David Anderson ConservativeParliamentary Secretary to the Minister of Natural Resources and for the Canadian Wheat Board

Madam Speaker, I welcome the perspective of the member opposite, who is from downtown Toronto. Perhaps because she is from there, she is not familiar with a couple of the issues.

She referred to the survey that was taken by the Wheat Board. She probably does not know that there has been great discussion about the voters list, which has been polluted for over a decade and has not been cleared up. I would like to give a couple of examples and then ask if she can somehow justify them because she supports the results.

The father of someone close to me died last year and the ballots were sent out a couple of months ago from the Wheat Board. My friend's mother got a ballot in her husband's name and the estate got a ballot as well. One of my colleague's had a little old lady poke him and say that she wanted to talk to him about the Wheat Board. He asked what it was about and she told him that her brother and sister both got ballots and they were both dead. I have two colleagues here who are farmers and landowners who did not get ballots.

How can she and her party justify supporting this charade?

Marketing Freedom for Grain Farmers ActGovernment Orders

5:35 p.m.

NDP

Peggy Nash NDP Parkdale—High Park, ON

Madam Speaker, I want to inform the member opposite that food security and the well-being of farmers concerns everyone in our country. Farmers feed cities. We rely on farmers.

I have not reviewed the voters list for this plebiscite, but, surely to goodness, if the government is concerned with that list, then it should obey the law, conduct its own vote and let farmers decide the future of the Wheat Board. It is as simple as that. Why does it not allow the farmers the democratic right to decide whether they will be able to keep the Wheat Board? That is the government's responsibility under the law.

Marketing Freedom for Grain Farmers ActGovernment Orders

5:35 p.m.

Conservative

Leon Benoit Conservative Vegreville—Wainwright, AB

Madam Speaker, I truly am delighted to take part in this debate. For me personally, this is the beginning of the end of a 40 year struggle. I started 40 years ago to work to try to end the Wheat Board monopoly, but I will talk a bit about that later.

It is the end of a 70 year period during which time the Wheat Board has had a monopoly and farmers have had no choice. Marketing wheat and certain classes of barley had to be done through the board. Other grains were included during part of that time as well.

It is the beginning of the end of an era, and I am proud to be a member of a government that is doing the right thing after all of this time.

I cannot measure exactly what the benefits or the hurt caused by the Wheat Board having its monopoly. What I do know is some of the hurt caused to my father who farmed most of his life. When I was a young boy during the sixties and early seventies, I remember the harvest finally finished when fall arrived. For many of those years, my father had good crops but he could not market them. We were a large family and we did not have a lot of cash flow. I remember my father desperately trying to get money to buy boots for us for the winter. He did not have the money. I remember my father desperately trying to get enough money to pay some of the bills for fertilizer and pesticides and other farm inputs, and he could not do it. He had the grain, but he could not find a market for it. Therefore, he went out to find a market on his own and he found one for his wheat and barley across the border. It was a poor price, but at least it would provide the cash flow to help get the winter clothing for the family and to pay enough of the bills that the suppliers would send again next year.

As a result of the Wheat Board rules, my father could not cross the border to sell the grain when he found one so he could do those things for his family. I am not talking about the border with the United States. Our farm was two miles from the Saskatchewan border on the Alberta side. Because of the laws in place under the Wheat Board legislation, he was not allowed to take his grain across the border, 50 miles away, where he found a market with feeders, people feeding cattle and hogs, because the Wheat Board had to be protected.

That is what I grew up with. My father's opinion of the Wheat Board before that I do not know, but I do know he was frustrated by these restrictions put on him by the board at that time.

I am proud to say that with this legislation one of the many changes that will take place is that farmers will now be allowed to take grain across provincial borders without fear of penalty. That is a step in the right direction.

It has been a 40 year struggle for me. It started when I took agriculture at university. In 1970 I took my first marketing course. I was fortunate enough to have as my instructor Professor Joe Richter. He came into that marketing course the very first day and said that monopolies were always a bad thing, whether they were private or government. He said, furthermore, that this applied to the Canadian Wheat Board.

I admit that a lot of my classmates were not very sure about that. They had been taught by their parents and grandparents that the Wheat Board was something almost sacred. By the end of that course, every one of my colleagues understood why the monopoly simply was not a good thing.

That was the start of my struggle, but I moved on. I went on the advisory committees of the Alberta Wheat Pool, things like that, and then 18 years ago I became involved in politics.

Half of my first speech as a politician was on the Wheat Board and how we had to end the monopoly. I talked about how we had to give farmers the freedom to market their grain in the fashion that they saw fit. It has been 18 years as a member of Parliament. Now, finally, it is the beginning of the end. The monopoly will be removed and we will be on to bigger and better things.

This is a rights issue. I hear all the arguments about plebiscites and other things, whether the board has offered an advantage or not. Personally, I simply do not believe those things are the issues.

The issue is rights and equality. On the equality issue, why should farmers in western Canada be treated differently and given fewer rights and options than farmers in central Canada? There is no good answer for that. No one can come up with a good answer because there is not one.

When it comes to rights, it is property rights issue. Farmers put all of the money into producing their grain. Farmers put all of the work, the sweat, the toil into producing their grain. When it comes time to sell their grain, they simply do not have a basic right that anybody else in any other industry in our country has and, in fact, that anybody else in any democratic country has. That is wrong.

This legislation is about restoring the rights to western Canadian wheat and barley growers and restoring equality so that western farmers are treated equal to eastern farmers.

People ask how we ever got into this mess in the first place. The mess started back in the early 1920s. There was a form of the Wheat Board that was put in place at that time. It was put in place absolutely respecting the rules of co-operatives. One of the basic principles, the key principal of all the co-operatives that helped build the west, was freedom, freedom to either use the co-operative or not, freedom to be a member or not. That is the way the Wheat Board was established. It was voluntary.

Then in 1935, once again, it was established as a voluntary organization. It is exactly what we are asking for right now. Farmers had a right to either market through the Wheat Board, if they chose, or to market through any grain company they wanted, if they chose to do that. That is the way the Wheat Board was established.

It was only in 1943, under the War Measures Act, when the government wanted to get cheap grain for the war effort in Europe, that the monopoly was put in place. It was put in place under the War Measures Act, why to give farmers a better price for their grain? Absolutely not. It was to get cheap grain for the war effort, and that was acceptable. In war we have to do some things we do not like to do. I am not criticizing the government of the day in any fashion.

What I am criticizing governments for is that after the war the monopoly was not removed, and it has not been to this day. That is a basic and unacceptable infringement on basic human rights and, in this case, property rights. It is time this was changed.

It is about that. All of the talk about a vote and plebiscite is not valid, because I would argue that democracy should not be used to remove basic human rights.

To use maybe a poor analogy, and I do not have much time to do it, we were all elected in the House knowing what our salaries would be. What if the Speaker decided that there would be votes in each of our constituencies, but only in the constituencies in central Canada. A vote would be held to have the people determine whether an MP should get paid or the amount an MP should be paid.

There is a vote and democracy takes place. The people decide that maybe MPs should not get paid at all or should get paid much less. It is a vote. It is democracy. That is what the members are arguing for over there. However, is it right? Of course it is not right.

Maybe it is not the best analogy, but whether there is a vote and all of the other arguments made whether the monopoly is good or bad is not the key issue. The key issue is we have to restore the basic right of farmers to sell their property and to do it in any way that they see fit.

Marketing Freedom for Grain Farmers ActGovernment Orders

5:45 p.m.

NDP

Robert Aubin NDP Trois-Rivières, QC

Madam Speaker, I listened carefully to the speech by my distinguished colleague, and I would even say that I listened emotionally, since it is clear that this issue is close to his heart. I was very touched by his description of his family and his father, who tried to pay the bills by exporting his grain. His speech gave me the impression that the cooperative movement at the heart of the Canadian Wheat Board also contributed to an increase in revenue for all farmers.

Will the passage of Bill C-18 mean that smaller producers will end up facing the same problems we once managed to get rid of?

Marketing Freedom for Grain Farmers ActGovernment Orders

5:45 p.m.

Conservative

Leon Benoit Conservative Vegreville—Wainwright, AB

Madam Speaker, in fact, I have absolutely no doubt nor do any of the farmers that are my neighbours and friends. I have farmland in Saskatchewan. I rent land to some. I also have some custom farm for myself, so I have grain to sell too. I know there is always a difficulty in the fall to get the cashflow needed to pay the bills. That is still a problem today, so we are limited to crops like canola to get cashflow in the fall to pay the bills.

For me personally and for my friends and my neighbours, it would be terrific to know that for wheat I grow next year I can contract that right after this legislation passes and I can lock in a price for next fall. I can actually market that wheat early in the fall, so that I have some cashflow to pay my bills and I do not have to rely on selling canola at a time when the price is low. To me this has a personal impact right now as well.

Returning the Wheat Board to what it was, and it was apparently very effective before, that is the right thing to do.

Marketing Freedom for Grain Farmers ActGovernment Orders

5:45 p.m.

Liberal

Frank Valeriote Liberal Guelph, ON

Madam Speaker, we are talking about the sales and marketing arm of every wheat farmer out west and I understand that there are some who are going to gain from this. You have made it clear that you and some others will gain from it. Yet, I talk to farmers who do want to get rid of the Wheat Board who have admitted to me that thousands of farms will close because there are farmers who are past the average age of 50 who will not be able to withstand the transition.

As a consequence, those small farms will close. Small economies in rural areas of the western provinces will suffer dramatically. Even they admitted to it. Lo and behold, those very same comments were made in The Economist.

I want to know why do you place the needs of a few above the needs and preferences of the many when 62% voted in favour of keeping this board?

Marketing Freedom for Grain Farmers ActGovernment Orders

5:50 p.m.

NDP

The Deputy Speaker NDP Denise Savoie

Before I recognize the hon. member, I would like to remind all members, especially in controversial debates, to direct their comments through the Chair.

The hon. member for Vegreville—Wainwright.

Marketing Freedom for Grain Farmers ActGovernment Orders

5:50 p.m.

Conservative

Leon Benoit Conservative Vegreville—Wainwright, AB

Madam Speaker, the member has it so wrong that it is unbelievable. Two years down the road ask farmers what they think of what has happened when they get the freedom to market. The member is right in one regard that there are some farmers who are concerned about losing what they see as protection from the Wheat Board monopoly. But many of them actually believe what we are doing is taking the Wheat Board away entirely which we are not doing. All we are doing is removing the monopoly. The board will still be there. If they want to market through the board, there is no real transition period for them. That is not a problem at all.

If I were allowed to make a wager, two or three years down the road farmers who are concerned about this change would say they were worried about it, but it has been a really good thing and they are glad that someone had the guts to finally do it.

Marketing Freedom for Grain Farmers ActGovernment Orders

5:50 p.m.

NDP

Robert Aubin NDP Trois-Rivières, QC

Madam Speaker, thank you for giving me the floor and allowing me to participate in this debate. This morning, when I was preparing this brief speech, I began with a formal sort of phrase such as “Thank you, it is a pleasure to be taking part in this debate.” When I reread it, it was clear to me that there was a problem because I am not pleased to be taking part in this debate. I am interested in taking part in it, but it brings me no happiness.

I have discovered something else as I write my speeches. All of my colleagues have discovered it, and they have more experience than I. I have begun hearing voices. We hear a lot of voices in the House, and I have a feeling they stick with us when we are sitting in front of a computer. I figured that some people would ask me why a member from the east, a city boy, a new member of Parliament to boot, is talking about a topic that concerns western Canada. They might also wonder what I know about farmers in the west. I admit that I am not sure when we stop being new members; that is something I have yet to learn here on the Hill. Of course, I agree that there are certain subtleties that I do not grasp. But the fact remains that in Quebec, we know about workers' groups and, what is more, we respect them.

For example, we need only think of the creation, development and growth of co-operative movements, such as the Mouvement des caisses populaires Desjardins, which enabled a number of workers in many different sectors to be able to grow together without leaving anyone behind. There are also agricultural co-operatives. We have some co-operative agricultural movements back home in Quebec. I could talk about investment funds like the FTQ, which was created by workers who invest in businesses. That is another co-operative movement that is an extraordinary jewel in Quebec and that, as I was saying earlier, attempts to give the workers it represents—and for whom it works—the means to grow without leaving the smallest ones behind.

I can say that for Quebeckers, myself included, being sensitive to the cause of workers in every sector, including agriculture, is probably part of our genes. We are listening sympathetically and we care about the legitimate concerns of the western farmers.

In the few hours and days that I have been listening to the debate on Bill C-18, it has become increasingly clear that this is essentially an ideological debate, in which the sacrosanct ideology of free enterprise is being pitted against the willingness of workers to organize themselves and grow together. It has also become clear that it is important to try to clear up some rather off-putting myths that some people have been spreading here on the Hill for months.

Here is one. Since the debate began on Bill C-18, I keep hearing people talk about western farmers as though they were one homogeneous group. I think the reality is quite different. Now is the time to put our democratic rules into practice, the very rules that epitomize the society in which we live. Since September of this year, I have been living in a strange world, one where the basic democratic rules that I taught for such a long time seem to have been rewritten. I used to teach my students that the free and democratic expression of a vote was, in most cases, 50% of the votes plus one, except in some cases of associations or constitutions that require two-thirds of all votes. However, 50% plus one, I think, was a clear enough agreement for everyone. However, since May 2011, my colleagues across the floor have been trying to convince me that 39% of the votes is a strong mandate.

I have heard it enough times that it has started to stick. I am not saying that I agree, but I hear it a lot. I still have a hard time with this concept, but I do hear it.

In reading the results of the referendum of western farmers, I thought to myself that if 39% is considered a strong mandate, then how would we describe 62%? The word that came to mind was “colossal”. It seems as though western farmers, although they were probably not unanimous, gave a colossal mandate to their association to do everything possible to protect and safeguard the Canadian Wheat Board. Furthermore, when an institution belongs to the farmers, is managed by the farmers and is funded by the farmers, I seems to me that the decision should, at the end of the day, be theirs to make.

When I agreed to become a member of Parliament on May 2, I knew that part of my job would be to help draft, introduce and vote on legislation that would guide our way of life, but little did I know that, as legislators in this House, we could somehow be exempt from the law when we felt like it.

That is what I understand from the attitude of the government which, according to the act, has an obligation to consult by referendum or plebiscite but has decided to try to get around this obligation and is refusing to recognize the very referendum conducted by farmers. Does this mean I have to go back and teach my students something even worse? The act requires a referendum for any major change. Does that mean that dismantling the Canadian Wheat Board does not constitute a significant change in its development?

A certain number of factors also lead me to believe that we could consider a mixed model under which the majority would keep the Canadian Wheat Board while those who are not interested could suggest another model. That is what the government also seems to be proposing in its bill. I am reluctant for one simple reason: although the model is interesting theoretically and looks good on paper, in reality, it does not work. In fact, without the Canadian Wheat Board, farmers will be in competition with each other rather than working together as a single major player that is able to compete with the large, multinational agribusinesses of the world.

The smallest farmers will struggle to save their family businesses, to the advantage of the largest producers who will have the means to buy them up. Clearly, we would be making the economy of many agricultural regions in western Canada more fragile. Dramatic drops in price and loss of revenue would be unavoidable since the rule of the competition would now be every man for himself. In this regard, it seems to me that Australia's experience should serve as a warning and that we could learn from their experience.

In addition, have we truly considered the social consequences of shutting down the Wheat Board? Of course, it is not just about money, but the Wheat Board does allow for marketing in 70 countries. I would like the government to name me one farmer who could do that without selling his grain to a large multinational company.

The Wheat Board puts $4 billion to $7 billion back into farmers' pockets each year and it has many advantages.

In closing, I would like to ask a very quick question. Why does the government not want to hear western farmers' clear and democratic statement?

Marketing Freedom for Grain Farmers ActGovernment Orders

6 p.m.

NDP

The Deputy Speaker NDP Denise Savoie

The hon. member will have five minutes for questions and comments the next time this bill is called for debate.

It being 6 p.m., the House will now proceed to the consideration of private members' business as listed on today's order paper.

Importation of Intoxicating Liquors ActPrivate Members' Business

October 20th, 2011 / 6 p.m.

Conservative

Dan Albas Conservative Okanagan—Coquihalla, BC

moved that Bill C-311, An Act to amend the Importation of Intoxicating Liquors Act (interprovincial importation of wine for personal use), be read the second time and referred to a committee.

Madam Speaker, it is with a tremendous amount of pleasure that I rise in the House today to kick off the first hour of debate at second reading of Bill C-311, An Act to amend the Importation of Intoxicating Liquors Act (interprovincial importation of wine for personal use).

I would first like to recognize the work of my colleague from Kelowna—Lake Country. Members will know he has done a great deal to move this important issue forward and to help an important Canadian industry grow and prosper.

I would like to share with all members of the House why I believe this bill is important.

Twenty years ago in the province of British Columbia there were roughly 15 wineries. Today the number is closer to 200 growing close to 10,000 acres of grapes, with a crop yield in excess of $40 million annually. More importantly, this has created an industry that provides thousands of jobs, even spinoff industries, such as, barrel making, stainless steel tanks and fabrication, laboratories, bottle and label making, marketing, and agri-tourism.

The economic benefits of the wine industry are far reaching. It is a clean industry that does not pollute our skies or rivers and is something at which many families can prosper, including first nation communities. That is correct. In the riding of British Columbia Southern Interior is Canada's first aboriginal owned winery. It makes great wines. In my riding of Okanagan—Coquihalla, much like the ridings of Kelowna—Lake Country and British Columbia Southern Interior, we know first-hand the significant value and economic benefits of the wine industry.

Here is something very exciting. Nova Scotia is an emerging wine region. In fact, I have learned that Nova Scotia has discovered a great varietal called the l'Acadie grape which is well suited to the local climate and produces great wine. Today, as an emerging wine region, there are roughly 15 wineries in Nova Scotia, exactly where British Columbia was 20 years ago. Let us not forget that today B.C. has close to 200 wineries. That is great growth and prosperity for the B.C. wine industry and holds great potential for the province of Nova Scotia.

It does not end there. I have also learned that in the province of Quebec there are now five different wine regions and within those five regions are some 50 Quebec wineries that also produce some great wine. In Ontario the number grows to close to 140 wineries with roughly 16,000 acres planted in grapes. In fact, there is now a winery in every province of this great country. That is why we must not overlook the importance of supporting the Canadian wine industry, but there is a challenge.

Some 83 years ago during the prohibition era, a law was passed to make it illegal for everyday citizens to transport or ship wine across provincial borders. It is, for all intents and purposes, an interprovincial trade barrier, meaning that a winery in Quebec cannot legally send a bottle of wine to a customer in Alberta. Here is where it gets more redundant. That same Quebec winery that cannot legally send a bottle of wine to Alberta can send that exact same bottle of wine to Texas. Many small Canadian wineries can access markets outside our borders more easily than they can inside our own great country.

Canadians have proven that they can produce some of the best wine in the world and yet they cannot sell the wine directly to consumers in other Canadian provinces. We, as members of Parliament, have an opportunity to work together to change that by supporting Bill C-311.

Imagine if cars built in Ontario could not be sold in British Columbia. What if prized Nova Scotia lobster could not be sent directly to all households across Canada? This is the reality for many of the small Canadian wine producers. Those in the wine industry have been battling this unjust prohibition era legislation for many years, but collectively they have been the underdog. For a small family winery, as the vast majority of them are, without sufficient volume and financial resources, selling through large-scale provincial liquor distribution is very costly. That is why this prohibition era legislation is particularly harmful, because it restricts any marketplace alternative.

I am not a wine drinker, but I do appreciate that all across Canada from coast to coast we have families who work very hard to grow grapes. They invest their life savings into their vineyards and turn those grapes into a value-added commodity that helps drive our regional economies and puts people to work. However, an 83-year-old prohibition law essentially denies these same Canadian wine producers the ability to access the Canadian marketplace like every other Canadian producer can.

I will talk about how the bill hopes to rectify this situation, but first I will provide some background for the benefit of members.

The Importation of Intoxicating Liquors Act controls the importation of intoxicating liquors into Canada and between provinces. Ultimately, the Canada Revenue Agency is responsible for the Importation of Intoxicating Liquors Act, typically referred to as the IILA. At the border, this is administered by the Canada Border Services Agency. However, neither the CRA nor the CBSA administers or enforces the IILA in respect of interprovincial transactions.

Currently, the IILA dictates that all imports of wine from one province into another must be made solely by the provincial liquor board or a private corporation designated by that province. This prevents wine to be brought in or to be shipped by an individual from one province to another. This is why Canada Post and other shipping companies will not allow a citizen or a winery to directly send wine across a provincial territory. It is also why it is illegal for citizens to transport wine in person across provincial borders. That means if someone travels to Gatineau and purchases wine, the moment it is brought back to Ottawa, the person has broken a federal law according to the IILA.

Bill C-311 would amend the IILA to allow Canadians to purchase wine while visiting another province and then bring that wine back home into their own province. Bill C-311 would also amend the IILA to allow for domestic wineries to market and sell their products directly to consumers from other regions of the country.

To be clear, the purpose of the exemption is solely for personal use and not for commercial purposes. The personal exemption quantity limit is established individually by each province in question. To date, both Alberta and Ontario have developed a personal exemption policy for a provincial exemption definition. Other provinces have declined to develop a personal exemption on account of the IILA making the personal importation of wine illegal. That is why it is so important that we take action to create this personal exemption.

I would like to take a moment to share with the House that this proposal has generated a great deal of support from across Canada. In fact, even today I received a letter from Federal Express Canada in support of this bill. The Canadian Vintners Association and the Canadian Chamber of Commerce are in support of a personal exemption for the delivery of wine directly to consumers from outside their home province.

When reading the newspapers recently, I was pleased to learn that the Liberal finance and revenue critic, the member for Kings—Hants, supports the idea of reforming the IILA. The leader of the B.C. NDP agrees and last week stated that the B.C. NDP is advocating for an industry that employs a lot of people, is of huge value and is a cultural symbol in the Okanagan and a lot of other regions as well. I would also note that our NDP colleague, the member for British Columbia Southern Interior, has also made it clear to the Minister of Agriculture and Agri-Food via correspondence that he would like to see changes to the IILA on behalf of his constituents.

Before I close I would like to share with the House the reality of a small family-run winery in my riding.

A typical 15-acre vineyard can yield roughly 40 tonnes of grapes per year. Those 40 tonnes of grapes, all going well, would then produce just 2,500 cases of wine. To sell through the large-scale liquor distribution system is very costly for a small winery. In my province, a small family winery is potentially looking at costs of 60% to sell through the liquor distribution branch, LDB, bureaucracy. That means of the 2,500 cases of wine, the first 1,500 cases are sacrificed solely to pay for the overhead of selling through a government corporate structure. That leaves just 1,000 cases of wine for a small family winery to try to pay the bills, provide jobs, pay taxes and make a living.

The reality for small wineries is that they cannot afford those kinds of costs. That is why opening up the Canadian marketplace is of such critical importance to the wine industry.

This week a small winery owner told me that this IILA exemption could increase his business by a potential 10%. That means more capital would be available for him to invest into expanding his winery. When I asked the winery owner what he would do with that added revenue, he was very quick to respond. He needs to build another 2,500 square foot building. That new building would house some new stainless steel fermentation tanks that would also need to be purchased. That creates jobs and supports our economy.

I would like to thank my colleagues for listening to my comments today. I am hopeful they will join me in supporting this bill and the Canadian wine industry.

Importation of Intoxicating Liquors ActPrivate Members' Business

6:10 p.m.

NDP

Hoang Mai NDP Brossard—La Prairie, QC

Madam Speaker, I would like to thank the hon. member for his speech.

I have a question for him about Bill C-311. Currently, certain governments that do not use an exemption collect revenue on wine imported from other provinces. I would like my colleague to give me some reassurance.

Could the member explain to me if this bill would prevent a provincial government from collecting revenue from a wine imported by an individual from another province? Basically, would the province that wishes to continue to get revenue from those be allowed to do that?

Importation of Intoxicating Liquors ActPrivate Members' Business

6:10 p.m.

Conservative

Dan Albas Conservative Okanagan—Coquihalla, BC

Madam Speaker, there is no question that Bill C-311, if passed, would result in increased wine sales. Currently all of Canada's major wine-producing regions have the HST that is applicable on the sale of wine, regardless of where that wine is sold across Canada. Increased sales would mean more HST revenue both to the federal and respective provincial governments. There is also HST on shipping so, again, we would see a net taxation gain for many of the provinces that have these wineries.

Importation of Intoxicating Liquors ActPrivate Members' Business

6:15 p.m.

Green

Elizabeth May Green Saanich—Gulf Islands, BC

Madam Speaker, I rise with pleasure to assure the hon. member for Okanagan—Coquihalla of the complete support of the Green Party caucus for this long overdue reform. In Saanich—Gulf Islands, we also have numerous wineries. I could name them but it would seem to be pandering to my constituents who run the Muse Winery, the Garry Oaks Winery, the Church & State winery, Salt Spring Vineyards, and I could go on.

I commend the member for bringing this bill forward. I will do everything in my power to help it pass. I hope all members in this House will ensure this legislation passes.

Importation of Intoxicating Liquors ActPrivate Members' Business

6:15 p.m.

Conservative

Dan Albas Conservative Okanagan—Coquihalla, BC

Madam Speaker, I appreciate my colleague's support.

Many of the winery owners I have spoken to have suggested a sales volume increase in their business of at least 5% and close to 10% due to this change. In the case of every winery owner I have spoken with, increased revenues will be directly and immediately reinvested into the local economy, something I am sure the member's riding would be supportive of due to her riding's involvement in the industry.

Importation of Intoxicating Liquors ActPrivate Members' Business

6:15 p.m.

Conservative

Mark Adler Conservative York Centre, ON

Madam Speaker, I would like to congratulate my hon. friend for righting an age-old wrong and getting rid of an old anachronism that does not really apply in our time.

In 1988 we saw the opposition parties, both the Liberals and the NDP, oppose the Canada-U.S. free trade agreement. We have seen them oppose a number of free trade agreements. They are never supportive of releasing the barriers to trade and creating more opportunities for business.

Has it not been proven that once Canadians are allowed to compete on the world stage, we can prosper? The member's bill is a great example of allowing Canadians to act freely on the world stage.

Importation of Intoxicating Liquors ActPrivate Members' Business

6:15 p.m.

Conservative

Dan Albas Conservative Okanagan—Coquihalla, BC

Madam Speaker, there is no doubt that Canada is a trading nation and we benefit from trade. One of the reasons we will hopefully see all-party support for this bill is the fact that public opinion is far ahead of us. This is simply a catch-up to right a policy that is no longer held in public opinion as being a good one. We could allow those small family wineries to prosper and take control of their own destiny. I think that is something all members of this House want to see. We want to see jobs and growth in our ridings.

Importation of Intoxicating Liquors ActPrivate Members' Business

6:15 p.m.

Liberal

Scott Brison Liberal Kings—Hants, NS

Madam Speaker, I support this legislation wholeheartedly and intend to be one of the seconders of the legislation.

In my riding of Kings—Hants, we have seen tremendous growth in the wine industry. In fact, on our property we raise L'Acadie grapes ourselves. Those L'Acadie grapes resulted from research at the Kentville research station.

Does the member agree that the government must invest in regional local research in these research stations across Canada and that local research is fundamental to growing--

Importation of Intoxicating Liquors ActPrivate Members' Business

6:15 p.m.

NDP

The Deputy Speaker NDP Denise Savoie

The hon. member for Okanagan—Coquihalla has 20 seconds to respond.