AGRI Committee Meeting

STANDING COMMITTEE ON AGRICULTURE AND AGRI-FOOD

COMITÉ PERMANENT DE L'AGRICULTURE ET DE L'AGROALIMENTAIRE

EVIDENCE

[Recorded by Electronic Apparatus]

Thursday, October 23, 1997

• 0900

[English]

The Chairman (Mr. Joe McGuire (Egmont, Lib.)): I call this meeting to order.

We shall resume consideration of Bill C-4, an act to amend the Canadian Wheat Board Act and to make consequential amendments to other acts.

We'd like to welcome to our committee meeting, from the United Grain Growers, Mr. Ted Allen, president and chairman, and Mr. Blair Rutter, manager, policy development.

Welcome, gentlemen.

Mr. Ted Allen (President and Chairman, United Grain Growers): Thank you, Mr. Chairman.

The Chairman: As you probably have been informed, our procedure here is to take a 10-minute statement from you and then to go directly to questions. We have 45 minutes only, so we have to be as concise and efficient as we possibly can. As you know, we have five parties now, so we don't have any time to engage in too many theatrics or asides.

Some hon. members: Oh, oh!

The Chairman: We'll hear from Mr. Allen.

Mr. Ted Allen: Thank you, Mr. Chairman. It's a pleasure for the United Grain Growers to be able to be here today to make our views known to the committee.

UGG has always been structured so that choice is the principal guiding idea that we proceed from on matters of this nature. This therefore leads us to reluctantly conclude that this whole bill is fundamentally flawed in that choice remains beyond the purview of producers. It's an attempt, we believe, to make time stand still or even to turn the clock back. Therefore it is, in the longer term, doomed to failure, and we will continue to see a fractious debate among producers in western Canada over the marketing vehicles they would prefer.

Even since the committee met in the spring, a number of state trading enterprises have seen their monopoly powers removed. It's also worth while at this time to hark back to the past a little bit to see what our ancestors, who were the pioneers in the cooperative movement, had to say about choice. We have quoted in our brief a number of them, and they really are consumed, if that's not too strong a word, by the idea that participation in these kinds of entities must be voluntary if they are to be successful.

Therefore people who refer to this particular piece of legislation by terms such as “cooperative” are really not in tune with what the founders of the cooperative movement viewed as the fundamental driving principles behind all cooperation, which are choice and freedom.

I'll now refer to a few of the aspects of the bill that we are concerned about.

First of all is this whole issue of accountability to farmers. When you look at the definition in the legislation of the objective of the board, nowhere in that definition is there reference to maximizing farmers' returns or maximizing the pool returns. The mandate of this board is to market in an orderly manner. We're very concerned about that. When you look at the Canada Grains Council, for example, their mandate is much more producer-friendly; it's to act in the interests of grain producers.

• 0905

The governance model also has some major flaws to it. Basically, the so-called board of directors isn't really a board of directors in terms we are familiar with. It is another advisory board. It's an advisory board to the government rather than an advisory board to the wheat board, but nevertheless it's an advisory board. The power to hire and fire the CEO is not there, and that is the single most important power of any board of directors.

It's instructive to see what's happened with a similar model recently. It's been in the news. The Freshwater Fish Marketing Corporation of Manitoba has a similar structure. It's a creature of the government, but it is totally operational as a co-op. And yet this board has recently seen its CEO of 16 years, competent by all accounts, summarily dismissed, without the chairman or the board of directors, who are all fishermen, even being aware of it. That is the major risk you have when the government's powers supersede the board's and they're able to hire and fire the CEO of the board. In addition, this board must take instruction from the government at any time the government chooses to give it. So really its independence is almost non-existent.

Rather than go on at too great length, I'll merely touch on the contingency fund, which again we have serious concerns about, merely because it's compulsory. This fund, on a voluntary basis, has great merit, but as a compulsory check-off it will be offensive to many people.

In terms of the exclusion clause, it is totally unrealistic to expect that a board whose mandate is to act in the interests of the board rather than in the interests of farmers would recommend that their powers be reduced, that the crops they manage be reduced. So again, this is an unworkable proposition.

Also, the inclusion clause has the potential to create great debate. All kinds of questions surround the powers of that clause, which will engender more heat than light. Again, we come back to this business that if the board were a voluntary board, this issue would not be there, because those who wished to participate in the enterprise could do so and those who didn't wouldn't be forced to.

At this time I will turn the mike over to my colleague for some very brief comments. Mr. Rutter may have some things he wishes to add.

Mr. Blair Rutter (Manager, Policy Development, United Grain Growers): The difficulty we see with this bill is that it limits choices of Canadian farmers, and we believe that the wheat belongs to the farmers and that they should be free to dispose of it as they see fit. In a free and democratic society, people should be able to enjoy their property and dispose of it as they wish.

What this bill does is allow one group of farmers to impose their will on another group of farmers. As Mr. Allen mentioned, this runs counter to the cooperative principles that were well understood and championed by the earlier cooperative leaders.

• 0910

Let me emphasize that UGG supports and has the utmost respect for those farmers who wish to pool their grain and market it on a collective basis using the services of the Canadian Wheat Board. What we do object to is forcing all farmers to do that.

This bill doesn't do anything to resolve the acrimony that is out there in the prairies. As it stands now, this bill entrenches that acrimony and makes sure the battles are out there in the countryside, rather than dealing with the problem in Parliament, resolving it here, and making it a voluntary organization.

Thank you, Mr. Chairman.

The Chairman: Thank you, Mr. Rutter.

We shall go directly to Mr. Hill, then, for seven minutes.

Mr. Jay Hill (Prince George—Peace River, Ref.): Thank you, Mr. Chairman.

Welcome, Mr. Allen and Mr. Rutter. I appreciate your getting here so early this morning and making your presentation to the committee. I'll start out with one question and then turn it over to my colleague from Vegreville.

It was interesting to note that the central focus of your presentation—and I note it's a very extensive brief—deals with the option of choice, in other words, offering farmers more marketing options and freedom of choice. Certainly that's been the central focus of the official opposition to this particular bill.

I do want to turn to one issue you dealt with very briefly, which is the issue of the appointment of the president and CEO. Our position is that all 15 directors should be elected by the farmers in order to ensure greater accountability. We have pointed out to the government that it would only take three of the 10 elected directors to side with the five non-elected ones to actually see a situation where a majority of the farmer-elected directors were overruled. In other words, even though seven out of the 10 elected directors voted one way, they could be overruled by the other eight.

I wonder if you could give me a little more detail. I too saw the article in yesterday's Globe and Mail concerning the recent appointment of Mr. Fewchuk—obviously, in my opinion, a blatant political appointment to a very powerful board position. And it's certainly a concern of farmers that something similar could happen with the Canadian Wheat Board.

Mr. Ted Allen: Well, we share that concern.

Our view, though, is that the government is entitled to some representation on this board as long as they have a financial stake with tax dollars in terms of guaranteeing the initial payment and the borrowings of the board. We believe they have a right to be at the table. But really, in terms of giving the government a voice at that table, one is probably sufficient.

It's interesting to note, for instance, that the government guarantee of the borrowings of the Australian Wheat Board is going to terminate in 1999. You have to start to wonder at what point this government will do something similar.

As long as the taxpayer has a direct interest in the operations and financial risk, they have a right to be at the table, but to totally neuter this board by having the power to hire and fire the CEO is a gross mistake.

Mr. Leon E. Benoit (Lakeland, Ref.): I'd like to pursue the situation with the Freshwater Fish Marketing Board. Someone in my constituency has been keeping me up to date on this issue for some time, and ever since the rumour of the appointment of Mr. Fewchuk came forth, this person has expressed an extreme concern.

There's a lot of confidence in the former director of the board and president. They thought he was doing a good job. This was widely believed by members of the board and by the 3,500 fishermen. Now Mr. Fewchuk will be appointed to the board, and at the same time the government has said we're going to keep this former director on and, really, he's going to be able to continue to run the board. This is pretty much the indication that's been given.

• 0915

They're saying that the current director will continue to run the board. Mr. Fewchuk apparently won't really have a role to serve.

Mr. Gerry Byrne (Humber—St. Barbe—Baie Verte, Lib.): I have a point of order, Mr. Chairman. These expert witnesses are here to discuss—

A voice: Maybe they have a fishery in their backyard.

Mr. Gerry Byrne: Unless we're here to discuss the Freshwater Fisheries Marketing Board, I'd really like to get to the question here. We have expert witnesses who are here to answer questions.

Mr. Jay Hill: In rebuttal to that point of order, you're using up our time. They were the ones who raised this issue and we're merely replying to it.

Mr. Gerry Byrne: If you have expert witnesses' testimony to provide to this committee, I'm not aware of it.

The Chairman: Order, please.

Mr. Leon E. Benoit: Thank you, Mr. Chairman, for trying to restore some order to the committee.

I'm making this point for a very important reason. There's a direct comparison between what has happened in the Freshwater Fish Marketing Board and an extra cost imposed on those producers of $100,000 plus, because this patronage appointment, made by Mr. Axworthy, in fact won't provide any extra benefit to the commission, but it will provide a cost, which is totally borne by the fishermen. All the costs of operating the wheat board will be borne by western Canadian farmers.

I think they're a very good comparison, and it really makes very clear that the concern we've expressed on this issue is a valid one.

Even beyond the cost of having Mr. Fewchuk there, the concern I've had expressed is that this person may actually interfere in the operations. That's the greatest concern. If the government chooses to appoint to the Canadian Wheat Board a president and CEO who really isn't competent, who isn't acting in the best interest of farmers—mind you, the legislation, as you've pointed out in your brief, Mr. Allen, doesn't say that the wheat board necessarily has to act in the best interest of farmers—then that can't be good for western Canadian farmers.

I think this issue has been brought into a very real situation by what's happened with the Freshwater Fish Marketing Board.

Mr. Allen, you haven't really commented on that directly. Did you think this could happen to the Canadian Wheat Board under—

The Chairman: Excuse me, Mr. Benoit. We don't have time for him to respond. We have to go to our next questioner.

Mr. Chrétien.

[Translation]

Mr. Jean-Guy Chrétien (Frontenac—Mégantic, BQ): I am extremely surprised this morning to hear our first witnesses voice such sharp criticism of Bill C-4. In their opinion, this bill is flawed and doomed to failure. The process called for has not been clearly thought out, they say, and the board of directors would be nothing more than an advisory board, not to mention that the independence of the board would be virtually non existent. Toward the end of their presentation, they even said that this bill did nothing but increase the acrimony between the Canadian Wheat Board and grain producers.

I represent the Bloc Québécois and as a rule, I am the only Quebec MP on the Standing Committee on Agriculture and Agri-Food. My party supported Bill C-4, at least on first reading. It was also our intention to back the proposed legislation on second reading, even though we do have some serious reservations about the process set out for appointing the CEO and the five... Often, while not outright bizarre, appointments can be strange. Just this morning, we were talking about Mr. Fewchuk who has been appointed the CEO of an important board. This is a serious matter. We're talking about $7 billion in annual sales. We're not talking about some small hardware store opening up in a small, out-of-the-way town.

We're talking about a considerable sum of money, $7 billion, and several hundred thousands producers whose hands will be tied when it comes to dealing with this monopoly. I stated in the House that we were prepared to support this bill and side with the Liberal Party, but we still disagree with the appointment process.

• 0920

I haven't forgotten the appointment of my colleague, who was an independent MP, to the ambassador's post in Haiti. In order to free up his riding, he was appointed ambassador. It's these kinds of things that bother me. Often, clearly incompetent individuals are appointed to important positions.

What specific amendments would you suggest to the committee or to the House to make this bill more acceptable to your organization?

[English]

Mr. Ted Allen: Thank you.

We have made a number of recommendations in our presentation. The one that has received the most attention just lately, of course, is this business of who hires and fires the CEO. A board of directors who cannot hire and fire a CEO on their own is not really a board. That is very clear, and we make that point in our presentation.

There's another aspect of the bill that troubles us, which says basically that the board has to do the government's bidding whenever the government chooses to instruct it. Again, that clearly makes the concept of an independent board a sham.

Those are two issues we really think need to be addressed. The third issue that we really think is missing in this bill is the driver that this board is to act in the best interests of farmers. It's not that the government has never seen fit to do that in the past. The Canadian Grain Commission has that mandate, and we see no reason why the wheat board shouldn't have the mandate.

Those are just several examples of things we think are critical to making this bill workable in the short run.

[Translation]

Mr. Jean-Guy Chrétien: I'm going to interrupt you because this point interests me a great deal. You say that the board must act in the best interests of producers. You shouldn't even have to say that, as this should be a sine qua non. If the day comes when a witness can prove to us that this premise is in doubt and that the board could act in a manner that goes against the best interests of producers, then I promise you that I will withdraw my support. However, you cannot convince me of that.

[English]

Mr. Ted Allen: Well, clearly, as we point out, it's right in the bill. The mandate does not say anything about acting in the best interests of farmers. I can quote to you:

The Board is incorporated with the object of marketing in an orderly manner, in interprovincial and export trade, grain grown in Canada.

There's no reference to how this might impact producers.

[Translation]

Mr. Jean-Guy Chrétien: You make a point. Thank you.

[English]

The Chairman: Thank you, Mr. Chrétien. We'll go now to Mr. Easter.

I'd like to make a comment. I would entertain a clarification of Mr. Fewchuk's appointment, but that is a topic that can be best brought up through orders in council and hearings with the Standing Committee on Fisheries and Oceans. It comes under their purview, not under this committee's.

With that, we'll go to Mr. Easter.

Mr. Wayne Easter (Malpeque, Lib.): Thank you, Mr. Chair. In reality the Freshwater Fish Marketing Board, you probably know better than most, Mr. Chair, at this table is a smoke and mirrors discussion. You, I think, studied that in the last fisheries committee. They are two entirely different corporations in terms of their structure.

I want to deal with the last point first, in terms of the discussion with Mr. Chrétien. As to whether the board operates in the interests of farmers or not, in terms of its operating mandate there is nothing different in this legislation.

But as I said at the last meeting, the record of the Canadian Wheat Board to date is second to none, and we expect they'll do the same in the future. I will just read it to you out of their annual report:

A performance evaluation conducted during the 1995-96 crop year showed Canada ranks highly with its customers in such areas as quality of product, consumer service, technical support and dependability of supply.

Another study conducted by three economists showed the Canadian Wheat Board's single-desk system generates an addition $265 million per year in wheat revenue for farmers. I think that's a pretty good performance.

• 0925

In terms of your point on whether the farmers really have control over this board, you do, Mr. Allen, mention in your brief proposed section 3.05 in terms of accountability.

I think you only went so far. If you look at that proposed section of the bill, it consists of paragraphs (a) to (g), which are pretty all-encompassing in terms of what the board and the chairperson may do. The chairperson is appointed by the board. The chief executive officer of the board has a lot of control over the chief executive officer as well, and I'll refer you to proposed section 3.11:

3.11(1) The president is the chief executive officer of the Corporation and has...responsibility for the direction and management of the business and day-to-day operations of the corporation with authority to act,

—and here's the key point—

subject to resolution of the board, in all matters that are not by this Act or the by-laws specifically reserved to be done by the board or the chairperson.

So that's pretty all-encompassing in terms of keeping the board in control, of which the majority are producers.

In any event, I think what we're really having here is a difference in debate and philosophy, to a certain extent. On the point of the CEO, as you indicated, Mr. Allen, the government guarantees the initial initial, and has also the financial guarantees, which accounted I believe in previous years for $60 million, and last year close to $80 million.

Is UGG willing to trade off those kinds of guarantees and have the government withdraw then from appointing the CEO? What's the trade-off here?

Mr. Ted Allen: I don't think there needs to be a trade-off.

First of all, on your point about the chair, yes, they elect the chair of a quasi-advisory committee. Whether they do that amongst themselves or the government appoints the chair becomes a moot point if the power of that board is severely constrained. And really, the government's power to protect the public purse is there in other provisions of the act.

A plan has to be forwarded and approved by the government, in any event, before the board annually engages in various activities, including borrowings. So the protection of the public purse is not at issue here, whether the government appoints the CEO or the board appoints the CEO.

What we really have is a quasi-advisory board to the government on the issue of the wheat board, the way the thing is structured. Interestingly enough, there's only one area where the government cedes authority to the board, and it's an area where we don't think the government should cede authority to the board, and that revolves around what the mandate of the board should be.

We think the government should retain the authority to determine the mandate. After all, it is created by an act of Parliament, so really we think the mandate should stay with the government. Once having defined the mandate, the board should be allowed to function in an independent manner.

I don't think protection of the public purse is the issue, because there are other pieces of the act that do that very adequately. And again, the point I made earlier was that to make sure the government's eyes and ears are very closely attuned to what's going on there, we believe they should have the right to some representation on that board.

Mr. Wayne Easter: When you're talking of a corporation whose involvement in one of the key industries.... Experience has shown it to be so valuable in terms of maximizing returns back to producers though, Ted, that.... The financial commitment of the government—certainly the government needs to appoint one of the key officers on that board.

Your protection is there. Everything it does is subject to the resolution of the board. If they are unsatisfied with that individual, they can give them remuneration of a buck.

That's why I asked you the question directly. If you don't want the government to appoint the CEO, then the trade-off is those financial commitments. I don't think there's any other choice.

• 0930

Mr. Ted Allen: With respect, I must disagree with your assessment that the government's financial interests are not protected in the other provisions of the bill. I firmly believe they are.

I think too that we're not just talking about the governance of corporations here. Whether you have a charitable organization or any other entity, they almost always have a CEO, a chief executive officer, the most senior staff person who is directly accountable to the board for his or her actions.

I think the suggestion that the way the board could exercise its power is by reducing the remuneration of the CEO to $1 is incredibly naive. I'm sorry to use that term, but in law employees have all kinds of protections from that sort of action by boards and management. There's something in law called constructive dismissal. If a board chose to do that, I suspect that the CEO would within the hour be talking to his lawyer about constructive dismissal.

Mr. Wayne Easter: I'll just point out, though, that that protection to the board is there in proposed section 3.11. This is a different piece of legislation. It gives the protection to the board in terms of being subject to the resolution of the board.

Mr. Ted Allen: May I respond to that, Mr. Chairman, very briefly?

The Chairman: We don't have time for you to respond. We have to go to Mr. Proctor.

Mr. Dick Proctor (Palliser, NDP): I want to shift the discussion a little bit to the inclusion clause, because you've spent quite a bit of time on that in the written brief. During the hearings on Bill C-72 last year, there was a lot of discussion about how if there is to be an exclusion clause there should be an inclusion clause, so I just wanted you to take us through your concerns or your views on that clause.

Mr. Ted Allen: Fair enough. There are a couple of facets of the inclusion clause that strike us as being a recipe for disaster. I guess, though, we should preface that by saying that, again, this whole business of inclusion and exclusion clauses would not be there if we had a system of voluntary participation.

Having said that, it is not at all clear in the bill and it has not been made clear at all by officials of the Department of Agriculture as to who the legitimate parties would be that would be requesting inclusion. In fact, I think we had one official of the department suggest that if there was a debate about who is the legitimate voice of the producers in terms of wanting to see an inclusion take place, then they could fight it out in the courts. Surely that is not an acceptable way to make that determination.

Mr. Dick Proctor: Your brief indicates that you prefer a voluntary board. There are a number of people who feel that if you have that you don't in effect have a Canadian Wheat Board, that the wheat board is doomed. Would that be your view of such a result?

Mr. Ted Allen: Not at all. We, in our brief, referenced the historical precedent in Canada of a voluntary board. There was a disaster that happened at that time, but it wasn't as a result of the board being voluntary. It was a result of some pricing decisions that were made, some initial payment decisions that were made at that time that were ridiculous.

So we think that in Canada there's a precedent.

In Australia currently there's a precedent operating where on the domestic market the Australian Wheat Board competes with others for the business. In fact, the Australian Wheat Board has been very successful in competing with other entities.

What they do have as a result of that is some benchmarking to determine how well they're doing, and it turns out they're doing very well. They have something like 70% or 75% of the marketplace as a result of that process. It's working just fine.

• 0935

The Chairman: Mr. Borotsik.

Mr. Rick Borotsik (Brandon—Souris, PC): Thank you.

Mr. Allen, I'm going to be brief in my questions, and I hope you'll be brief in your answers, because I get only five minutes.

First of all, suffice it to say I agree with you on the governance. I strongly believe the governance suggested in this bill is a recipe for disaster. I don't believe there is going to be accountability through the chief executive officers being appointed by government.

I have a couple of questions. I would like to touch on exclusion again. In your report you suggest there should not be inclusion, and I agree. The answer I get as to why inclusion is there is that it's because there's exclusion. In your opinion, should both be taken out, the exclusion and the inclusion?

Mr. Ted Allen: I think there is an argument for some balance, but really the exclusion clause has been manacled in such a way that we know under this current bill it will never happen. The steps that have to be taken to make it happen are too bound up in some special interests.

Mr. Rick Borotsik: The argument is, Mr. Allen, that inclusion has to be there because exclusion is already part of the bill. Your opinion is that if both were out, UGG wouldn't have any objections.

Mr. Ted Allen: I don't see a problem with exclusion the way it's currently structured. Again, we come back to wanting a voluntary board. Then all these debates would be gone.

Mr. Rick Borotsik: I appreciate that. I don't think that's going to happen.

Mr. Ted Allen: But the exclusion thing...as long as the people who are most driven by maintaining the system are the ones who are going to make the call on this thing, of course it's not going to change.

Mr. Rick Borotsik: Okay. Help me clarify on this one. If the only way to get out of inclusion is to remove exclusion, would you have any objection to that?

Mr. Ted Allen: No, nothing would have been lost by doing that.

Mr. Rick Borotsik: I have a couple of other questions, and something I really haven't given much thought to, because I don't really think the indemnification clause in the bill is all that terrible.

However, Mr. Goodale's press secretary said:

The new CWB bill is the same as many corporations if they trade overseas.... Someone like UGG (United Grain Growers) I would imagine has the same thing...

That's the indemnity clause. Is that indeed the fact? Is your indemnification clause the same as this particular legislation?

Mr. Ted Allen: No, and there's a single word that makes all the difference in the world. The Canada Business Corporations Act, most of which applies to our company, says the company “may” indemnify. I believe that is the word. This bill I believe says “shall” indemnify. So there's no latitude to determine when and where employees will be indemnified.

Mr. Rick Borotsik: Thank you. I'd love to talk about the Australian Wheat Board, but I don't have time.

The last thing is this: in your priority list, if there were one aspect of the bill we could change—and forget about the voluntary as opposed to monopoly—what would that priority be?

Mr. Ted Allen: You start off with my priority and then say I can't have it.

Mr. Rick Borotsik: It would be nice if they would listen to realism, but....

Mr. Ted Allen: That's a difficult call. I guess really I would have to make it a package, a package where the government exercises undue control over it through the hiring and firing of the CEO and through having the authority to give direction to the corporation at any time to do anything the government wishes—those two pieces.

Mr. Rick Borotsik: One last question, then. We're going from a crown corporation to what they refer to as a “mixed enterprise” corporation. In your corporate situation, does that give you any cause for concern?

Mr. Ted Allen: That puzzles us, quite frankly, because I haven't seen in the bill a definition of what a mixed enterprise is. I've heard this term “mixed enterprise” used outside the bill, but I don't understand what the legal definition of it is. I don't know what a mixed enterprise is.

Mr. Rick Borotsik: Does it concern corporate UGG?

Mr. Ted Allen: I guess we have to be concerned only in the sense that we don't know what it means and we can't see it embedded in the legislation anywhere. So what is it?

Mr. Rick Borotsik: I don't know. Thank you, Mr. Allen.

• 0940

The Chairman: Mrs. Ur, we have four minutes left with these witnesses.

Mrs. Rose-Marie Ur (Lambton—Kent—Middlesex, Lib.): On the last point, that you don't know the difference between the mixed corporation and what we have presently, being on the panel it was quite apparent when we travelled out west that the mixed corporation really meant that some of their officials were elected. On the other hand, they're appointed. So that's where the balance comes in as a mixed corporation. That's what we were led to believe.

As I travelled with the panel out west on the Canadian Wheat Board, I found it interesting travelling from province to province. There certainly isn't a consensus out west on the CWB.

You want volunteer participation in this. What would your timeframe be—in one year, out the next?

Mr. Ted Allen: No. I think that is a fair question in terms of voluntary participation. I think most people believe that a reasonable timeframe would be more like three to five years.

May I ask a question for clarification? Is it a mixed corporation or a mixed enterprise, and is there a distinction between those two?

Mrs. Rose-Marie Ur: I was referring to a mixed corporation. If I recall correctly, this was the way it was indicated to us earlier, that this was the difference, because it was both elected and appointed, whereas at present it's appointed. That could be not quite accurate, but that's the way I remember it.

You said you had a concern that one group of farmers would be free to impose on another. Do you not feel secure? I certainly lend credence to the fact that we're going to have ten officials elected to this board, probably with a lot of expertise in farming, but they would not have the knowledge to act on behalf of all farmers. I'm sure the farmers won't be appointing people who would not be capable of doing the job.

With the government certainly standing behind the dollar factor, do you really think many people will run to be on this board? Should they have to be guarantors of the funding that would run the CWB?

Mr. Ted Allen: We have not said that they should be guarantors. What we have said is that the corporation should have the latitude to decide when and whom they will indemnify, and that would be the same latitude that's accorded any other corporation. Rather than rigidly saying that you must indemnify people, I think the board of directors should be able to say that you may indemnify people.

To get back to your question about the board of directors, it will represent very well the group of people who believe in central-desk selling. The people who don't accept that it must be a compulsory kind of activity will not be represented there because they've already determined that the process itself is flawed.

Mrs. Rose-Marie Ur: I found very interesting a statement by one of the presenters when we were travelling on the panel. He put it most eloquently, and I'll always remember this. He said that to have a volunteer board is much the same as allowing 2% of the people to drive the wrong way on the roads. What would it create?

Mr. Ted Allen: I think that's a very facile thing, because we all accept that society, in order to function effectively, needs to constrain the rights of individuals, needs to direct individuals in certain issues. My question has always been, is the sale of wheat and barley of such fundamental national interest that it must be done in a compulsory way? There are certain individual freedoms that we all accept must be constrained in the interests of the common good. Is this one of them?

The Chairman: Your time has expired. Thank you, Mrs. Ur.

Thank you, Mr. Allen and Mr. Rutter, for your very interesting brief and discussion.

Mr. Garry Breitkreuz (Yorkton—Melville, Ref.): I have a point of order. Mr. Chairman, I was assured in the House that when this bill came to committee I would have time to ask questions. Are we going to be able to bring these people back so I can ask them the questions that I have? I have not been given time at this point. I've indicated to you for the last half hour that I have questions, but it's structured in such a way that I can't ask them. Are these people going to be able to come back and answer my questions? I ask this because they are very important questions.

• 0945

The Chairman: They won't be coming back. This committee has agreed to hear these witnesses for 45 minutes each. It's up to each party to determine who wants to ask those questions in the time allowed. That's the way the committee is structured. That's the way it will be structured for the duration. But it's up to you people as to who wants to answer the questions on behalf of your party. It's not up to me; it's up to you.

Mr. Garry Breitkreuz: Yes, but we have been given seven or eight minutes—

The Chairman: You knew when you came in here.

Mr. Garry Breitkreuz: Do you feel that's adequate?

The Chairman: That's what the committee has agreed to.

Mr. Garry Breitkreuz: That's not true, sir.

The Chairman: Thank you very much.

We will call as witnesses Mr. Larry Maguire, president of the Western Canadian Wheat Growers Association, and Dr. Paul D. Earl, Manitoba policy manager.

Gentlemen, you are familiar with the process here. You have 10 minutes to make your presentations, and then we will have as many questions as we can get in in 45 minutes.

Mr. Larry Maguire (President, Western Canadian Wheat Growers Association): Thank you very much, Mr. Chairman. I'm pleased to see the great interest you have from Prince Edward Island in my affairs in western Canada.

I farm in Elgin, in the southwestern part of Manitoba. Dr. Paul Earl is our policy manager in our office in Manitoba. Our head office is in Regina, Saskatchewan, which in the last few days has become the last bastion of free enterprise hogs.

Thank you very much for the opportunity to be here. We will not read our full brief into the hearing. It's too long. There are some comments and key points we will make here this morning.

First of all, your committee must recognize that the impetus for change in the Canadian Wheat Board in western Canada began because farmers were seeking more choices a few years back in how grain could be marketed, not seeking more grains to be put under a monopoly. Therefore the legislation that's before us today, with an inclusion clause, points 180 degrees away from the direction Canadian Wheat Board reform has been moving in for at least the past decade in Canada, as it is.

This bill, in short, is not what progressive and innovative farmers need. The defence of the status quo and the appeal for inclusion of more crops is the voice of the past, not the voice of the future. It is the same voice that opposed tampering with the Crow rate and thus unnecessarily frustrated change for years. Your federal government has recognized the positive impacts the change in the Crow has had on value-added, particularly in livestock production and processing. The change in grain marketing policy could have as profound and as positive an impact, but it needs bold and progressive leadership, which we are looking for your committee to accomplish.

We deal more fully with the inclusion clause later, but we want to stress that no commodity group has called for other crops to be included in this process. This call for inclusion comes only from some extremist left-wing groups. We also point out that because of the ambiguity as to who will qualify as the association that represents the producers of the grain, the inclusion clause could be activated by any group that claims to represent farmers, and if a commodity group such as canola growers were opposed to the inclusion of canola but another group asked for it to be included, the only recourse for the canola growers would be to go to court. We don't think that would do very much for cooperation in western Canada and it would continue to be a very divisive process.

The major theme of our brief, the major message we want to leave with your committee, is twofold. First, the federal government must recognize there is a very high level of dissatisfaction with the status quo, as I've pointed out. Second, Bill C-4 will not satisfy those farmers in western Canada who need fundamental reform in grain marketing in order to manage their farm businesses properly. The bill will not settle the controversy in western Canada over marketing policy.

Therefore the wheat growers are making three recommendations for change to this bill. We believe these recommendations are the absolute minimum concessions that must be made to make this legislation acceptable to progressive farmers. We will explain these after I list them. The three recommendations are the removal of the inclusion clause, the removal of barley from the jurisdiction of the Canadian Wheat Board, and the inclusion of a pricing option allowing farmers access to internationally recognized open-market prices for wheat.

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First of all, on the inclusion clause, we believe that it should be dropped from the bill, as I said, because none of the commodity groups are asking for their inclusion today. In fact, the Alberta Canola Producers Commission and the Canadian Canola Growers Association have both put their opposition on record in letters to the minister.

Secondly, the threat of the inclusion clause will have implications for trade. It is counter to the spirit and the letter of trade agreements to which we are signatory, and sends the wrong message to international partners as well. Certainly the federal government recognized the importance of these signals to our trading partners and domestic industries when it recently cancelled the tariff rate quotas on barley.

Other positive moves that you've done have been deregulation in the air industry, the privatization of CN and the signing of GATT for more trade agreements that allow the opportunity for farmers in all parts of Canada to achieve more open trade.

So the process that's going before you in the committee that you're studying seems to be perpendicular to or at odds with some of the previous good moves that this government has already done.

Also, the chairman of the Canadian Canola Oilseed Processors Association in a letter to Minister Goodale has said that the inclusion clause is a clear signal that Canada is not serious about its trade position and this could negatively affect investment in value added.

Most importantly, the presence of the inclusion clause will continue to anger those who are seeking reform and will fan the flames of discontent that are burning across western Canada.

We also have concerns about the exclusion clauses. They are potentially as damaging as the inclusions, because they fetter the discretion of the government in making grain marketing policy by prohibiting the minister from excluding any grain from the wheat board's jurisdiction unless the board of directors requests it. This will make the CWB board of directors the arena for debate about grain policy rather than the body that could run the organization's day-to-day affairs. They will make wheat board elections ideological contests between pro and anti central marketing contenders rather than decisions about who is the best qualified to manage the Canadian Wheat Board.

The debate about grain marketing policy, which Bill C-4 will not end, belongs in the political arena, not in the wheat board boardroom. To put it bluntly, this abdication of responsibility by the government is like giving General Motors a veto over competition policy in the auto industry.

We also urge your committee to consider where these clauses would leave the critics of the status quo if the elected board is not open to change—and that's either way. Where would they go? The will of the majority cannot ignore the interests of a very large minority, particularly where that minority is responsible for the greatest part of production.

The second area that we talked about was the removal of barley from the wheat board's jurisdiction. There are many reasons for this.

Firstly, there were the results of the barley vote, where nearly 40% of the farmers, in spite of the question asked, indicated that they didn't want the control of barley marketing in western Canada to be under a monopoly any longer.

Secondly, it would be consistent with the recommendations of the Western Grain Marketing Panel that your government worked with a year and a half ago, which recommended the removal of feed barley. The maltsters have indicated that it can't be a dual market; it has to be one way or the other. So as the results of this plebiscite show, there is only one option left, and that is the removal of barley.

Thirdly, it would enhance our trading relationships. With the removal of TRQs, these maltsters are going to have to be in competition with foreign markets for that product in the future. We have to make a clear signal to our trading partners that we are serious about these issues, and it would show the same sign to farmers in western Canada.

The most important issue that we feel strongly about is the pricing option that we are releasing at a press conference in Regina this morning. This proposal allows farmers to forward price 25% of their wheat using the Minneapolis, Chicago and Kansas exchanges, the recognized exchanges. Producers would be able to sell a futures contract for part of their 25% allotment. Sometime before that futures contract month becomes a cash month, the producer would deliver his wheat to a country elevator or terminal, and upon delivery of the wheat the board would take over the farmer's futures position.

We stress here that nothing less than this kind of open, transparent pricing will be acceptable to farmers. There is a deep and growing suspicion about wheat board pricing, and a simple cash price mechanism tied to board PROs or EPRs will not suffice.

We believe this proposal would provide a real and effective risk management tool for farmers and would go a long way towards satisfying the needs of those who are calling for marketing reforms. It would also relieve the pressure on the border issue, because it would provide farmers with access to U.S. and international prices.

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Our position is that these three proposals represent the minimum changes that must be introduced into Bill C-4 to make it acceptable to our organization and to many other farmers in western Canada who are seeking more marketing options. The discontent among our members and among farmers in general is simply too great for us to accept much less. If the federal government makes no concessions on these concerns and does not provide risk management tools for these farmers there will be an ever-increasing level of dissent and perhaps more turmoil. It's not necessary. Farmers need to be able to realize these opportunities which the market presents if they are to be successful in managing their risk and their businesses in the future.

I'll leave it at that, Mr. Chair. I'll be more than glad to answer any questions you might have. We have other comments on specifics about the elections and the Ontario wheat producers process.

The Chairman: That could come out in discussion.

Mr. Larry Maguire: Very good. Thank you very much.

The Chairman: Mr. Hill.

Mr. Jay Hill: Thank you, Mr. Maguire, for appearing today.

To get back to the central focus, this business about the wheat board not being changed to make it in some form voluntary, the government claims this bill will enable a future board of directors comprised mainly of elected producers to move in that area, yet when I read the bill I don't see it. I see exclusion in the inclusion clause. In other words, it's an all or nothing type of thing. Either you can exclude certain grades and types of wheat or barley or you can include other commodities. I don't see it in the bill that the future board of directors would be able to move towards a truly voluntary Canadian Wheat Board. That's what you're saying as well, I believe.

Mr. Larry Maguire: Certainly that was our presentation in the Western Grain Marketing Panel a year and a half ago, that we needed a voluntary board. We actually outlined a mechanism for how a voluntary board would work. We think that's what is needed in western Canada. It would have settled a lot of these discussions and concerns that are out there today.

Mr. Jay Hill: Certainly our feeling in the official opposition is that it is a role of government and that the government is abdicating its responsibility to producers in the sense that it's not moving in that direction. I would like you to elaborate just a bit more and project ahead to the elections that presumably are going to take place at some time next year and how you see that will happen, what type of debate will take place, when it doesn't have the power in the legislation to move towards a voluntary wheat board.

Mr. Larry Maguire: Having already spent eight years on the Wheat Board Advisory Committee myself, representing western Manitoba, I can assure you the last debate was about whether you were in favour of a monopoly or against it. I see that will be the debate in the future, only the last go-around it was talking about wheat and barley. If the inclusion clause is still in there this one will be much more divisive, because it will be looking at the other crops as well, which are marketing fine today, and no one is asking to have these included in our monopoly. So the bill is much more serious.

That's why you never heard in the previous rounds of meetings last spring much debate from our side. We presented two presentations, one in Winnipeg and one in the Peace River. We represent 6,000 farmers in those areas, and we didn't feel it was necessary to try to bring them all to the table. The inclusion clause was not part of that bill, so you never heard from groups that wanted to make many presentations to this one, such as the commodity exchange group or the Canadian Oilseed Processors, who have now voiced their view very clearly that this is an interruption in their process.

Mr. Leon E. Benoit: I'd like to ask you a question on governance and your opinion of the elected board of directors and the fact that it would take eight out of ten of the farmer-elected directors to side with the farmers—or it might—on an issue to have the farmers' wishes really carried through. I would just like you to comment on the whole governance thing and whether you feel it would be effective in terms of accountability to farmers.

Mr. Larry Maguire: No, we don't believe this process that has been outlined will provide the accountability for farmers we were seeking. As an organization we wanted an elected board in a voluntary Canadian Wheat Board. We think that's very important.

If you really want to have a responsible board in western Canada, we think it's necessary to outline it and give it the same rights and regulations as the Ontario Wheat Producers' Marketing Board has, a board that is totally elected, has a guaranteed initial price, does not have to submit a financial plan to the federal government, and has absolutely no appointees on its board. If you really want to be consistent, let's get the same thing in western Canada as they already have in Ontario. It works very well there.

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Mr. Leon E. Benoit: We heard Mr. Allen, the witness just before you, say that he thought there was a need for some appointed representation. He suggested one would be adequate. We hear other members here saying that farmers electing 10 out of 15 should do that job, should make the board accountable to farmers.

Mr. Larry Maguire: The process they go through in Ontario and still have a guarantee on initial prices is that initial prices are established, the government has one opportunity to say whether they will back those initial prices or not, and if they choose not to, then they are readjusted. If they say that they will, then they are guaranteed for the year. The same could be done in western Canada.

There is just no need for any appointees on a board if you're going to be consistent in the regulations across Canada.

Dr. Paul D. Earl (Manitoba Policy Manager, Western Canadian Wheat Growers Association): The other point is that there is nowhere in this bill where this board of directors is made responsible to farmers. The board's prime responsibility is to the corporation. The corporation, as we've outlined in our brief, is primarily accountable to government because the CEO is appointed and for all the other reasons we've outlined. The notion that these elections are going to make this board accountable to farmers is, I think, a sham.

Mr. Leon E. Benoit: In fact, it states in the act that the board's responsibility is to government, not to farmers, and a recent court case has virtually upheld that.

I have a question on the cash purchase provision, the provision that would allow the cash purchase on the part of the wheat board. I've had some concern expressed, by livestock feeders in particular, that this will distort the feed grain market in Canada. Have you any comments on that?

Mr. Larry Maguire: From allowing farmers to have the ability to sell their own grain?

Mr. Leon E. Benoit: No. What I'm commenting on is the—

Mr. Larry Maguire: The cash option that we're looking at?

Mr. Leon E. Benoit: Pardon?

Mr. Larry Maguire: Oh. In here.

Mr. Leon E. Benoit: Yes. This legislation would allow the wheat board to get into the cash feed market, and feeders have expressed a real concern with that, saying that could distort the market. Do you share that concern?

Mr. Larry Maguire: Certainly we do. It may distort the grain market as well. We're concerned that we don't know what kinds of basis levels are being established there, because there's no posted basis.

Our process that we're outlining is to allow the farmer to enter the market when he or she wishes. Let the board establish the basis level if they wish, but then the farmer has the choice as to whether or not he can move that product. We're suggesting, number one, that they be limited to 25% of their sales and, secondly, that they have to deliver it to the board and when they do the board would pay them the futures position.

It would be outside of the pool. The futures position would go with the grain to the board, and there would be no risk to the board at all because they would offset the position in the futures market immediately. All they would have then is their administration costs, which we believe can be the lowest of any organization in western Canada.

Mr. Murray Calder (Dufferin—Peel—Wellington—Grey, Lib.): When we went out west, the reason why the inclusion aspect of it came into play was the fact that the questions were put to us that if you have a mechanism within the board to exclude a grain commodity, then you should have the mechanism within the board to include a commodity.

I read your report here, and there is one aspect of it that I'm interested in. You've said on page 6, “Likewise, to maintain a balance between the inclusion and exclusion provisions, the exclusion clause need not be an all-or-nothing either”. I'm just wondering if you would clarify that.

Right underneath, you're talking about the voluntary pools. I hear this coming up a lot: voluntary, voluntary. Are you suggesting that, with the board right now, if prices are bad the farmers should stay with the board and then when prices are really good they can jump out and deal on the free market and then jump back in underneath the government guarantee?

Maybe you could clarify those two points for me.

Mr. Larry Maguire: We've clarified a little bit about the guarantee, Mr. Calder, in relation to wheat. It certainly seems to work well in other commodities, particularly in the hog side in Manitoba, where 85% of the hogs are still going to the board in Manitoba.

We believe the Canadian Wheat Board has the ability to restructure itself. In fact, a year and a half ago, in our brief on the focus of a reformed Canadian Wheat Board, we suggested in many ways that it could work well in a revamped, voluntary mechanism.

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We won't take the time to go over those fully now, but voluntary pools have worked in many areas. When I was on the advisory committee we did look at shorter pooling periods for farmers and a number of other options. The board wants to do a direct pricing mechanism for farmers. All we're suggesting here is that instead of the board determining what that set price will be each week, the farmer should be allowed to enter the market portion of the grain he wishes to sell to the board.

All we're pointing out is that voluntary pools are options for grain companies to establish today. There's no reason why the Canadian Wheat Board couldn't do that today as well. They have worked in other countries, they have worked in other jurisdictions, and they have been done here in western Canada and eastern Canada in the past. They are nothing new. We're just suggesting that they be used.

Mr. Murray Calder: I have a bit of problem with that, but I don't have enough time to carry on.

Dr. Paul Earl: May I add something? You did ask whether we are proposing that a farmer be allowed to jump in and out according to the price. The answer is no, no, no. That objection to voluntary pooling which has been raised is totally spurious. We put a proposal before the Western Grain Marketing Panel that would have involved contracts, where the farmer contracts to deliver so much grain regardless of the price for a period of time.

So we're not proposing that. That is a silly definition of dual marketing and a silly definition of voluntary pooling.

Mr. Murray Calder: These are questions that have to be asked, because the next thing I want to follow along here is if we have a mechanism of exclusion as was in the old act and somebody exercised that clause to be excluded out of the Canada Wheat Board, say, for five years and they found out they made a mistake, how do they get back in?

Mr. Larry Maguire: If you have a voluntary board or a voluntary opportunity to market that product, then it would have to perform. The Canadian Wheat Board would have to perform to get the product those people need.

What we're suggesting is that they do contract grain to the board every fall. Farmers need the ability to manage their risks. They need the ability to hedge their input costs today. They know their bottom line. When they can hedge a profit into their operations they need to be able to use other mechanisms than purely the cash marketing options that are out there today, because they are losing opportunities in relation to world marketing and that affects their cashflow on a daily basis.

I'm sure you're aware that in agriculture, as in any other business, the cashflow needs of all people in a particular sector vary throughout the year. It's just a bit too tight today under the present mechanism we have and our membership is certainly seeking voluntary.... That's why we're saying it should be a voluntary mechanism.

Mr. Murray Calder: I'll pass to my colleagues.

Mr. Larry McCormick (Hastings—Frontenac—Lennox and Addington, Lib.): Mr. Maguire, you say we're losing opportunities abroad, but I'm sure the cash purchase provision.... It has been acknowledged that we've also missed opportunities in the past.

But I would like to jump back to the fact that you receive a government financial guarantee of all the financial transactions of the wheat board. It's a position other commodity groups and other producers would love to have. As the board could or would—and if it could—move in a direction of voluntary pooling, would you still want to have this, and do you feel you should still have this guarantee of all your transactions?

Mr. Larry Maguire: We indicated in our brief a year and a half ago that we were not against a guaranteed initial price staying in place if in fact that was the case, and for the farmers who want to be in a voluntary board we would like to see they have that initial price guarantee put in place, and left in place, for them if they feel that is security for them. What our membership is saying is that if we have the opportunity to be in a position to cash-price 25% of our grain against the futures market, it would be outside the pooling option of the board. So it would not impact the farmers who are staying within it. They will manage their own risk in relation to being able to hedge their grain in the marketplace, on a recognized futures exchange that perhaps reflects more the world price they feel comfortable with at that particular time.

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So they would not be in a guaranteed position. If you were in a contract position where you had to price 25% of your grain against the futures, you would not be part of that guarantee.

Dr. Paul Earl: I would like to add to that very briefly. Even now the Canadian Wheat Board very rarely has had to avail itself of the guarantee provision.

Our proposals back to the grain marketing panel also included a number of other risk management tools for the Canadian Wheat Board. The pools went bankrupt in 1929 because they didn't hedge their grain. They thought the grain exchange was a den of thieves, and they weren't going to have anything to do with it.

In the proposals we put forward, the wheat board would have risk management options. They would have the ability to close pools in the event of a very adverse and sudden price decline, so the need for a guarantee would virtually disappear. It is almost not there now, but we would provide other measures as well.

The Chairman: We will now go to Mr. Chrétien.

[Translation]

Mr. Jean-Guy Chrétien: I would like to comment on two points, namely the election process and the inclusion clause. As I am entitled to seven minutes, Mr. Chairman, I would like to use up approximately three minutes on the first point and four minutes on the second.

First, the election process which interests me a great deal.

In your brief, you suggest that we elect two representatives in Manitoba, three in Alberta and five in Saskatchewan. I see that you are ignoring British Columbia which was also an important part of the Canadian Wheat Board. Is this merely an oversight or is this deliberate on your part?

I would also like to know where you stand on the election process. Who will be qualified to vote? In paragraph 3, you mention producers of Canadian Wheat Board grains. You imply that someone who farms 1,000 hectares might be entitled to 10 votes, whereas someone who farms only 100 hectares might have only one vote. Someone with 50 hectares would get half a vote and so on. Don't you think it's anti-democratic to have the size of a person's holdings determine the importance of his vote? I would assume that in order to be eligible for a position on the board, a person would first and foremost have to be eligible to vote.

Please be brief, as I would like to come back to the inclusion clause.

[English]

Mr. Larry Maguire: Thank you very much; those are good questions. We certainly haven't forgotten about British Columbia. We have members—we have a director, in fact—in the Peace River region, and we represent farmers in the designated area from Manitoba through to the Peace River region.

By the way, it was two in Manitoba, three in Alberta, and five in Saskatchewan. As takes place now with the Wheat Board Advisory Committee, this also includes the Peace River district of British Columbia, which is the only area included in the designated region.

The voters would be producers of grain—wheat and barley—in western Canada. We believe it's very fair to allow farmers to vote according to their stake in the industry; after all, the new proposed act calls this a corporation. So it's normal business practice to vote according to your stake in the industry in any kind of a corporation anywhere in free countries.

We were particularly suggesting something parallel to what Australia is doing, where you have a minimum vote, perhaps for a certain volume of tonnes in the next.... Up to 500 tonnes would give you another vote, and maybe each 500 tonnes thereafter another vote.

At least with your numbers—the ones we've suggested—you would then take into consideration the situation where a 100-acre farmer, who may have one or two off-farm jobs in another area, does not cancel out the vote of a three-generation farm, where three families may actually be making a living off that land. We believe that to be fair. It is certainly not undemocratic.

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[Translation]

Mr. Jean-Guy Chrétien: In any event, it's not too democratic because if we exaggerate a little, an extremely powerful person could buy up large tracks of land and, to all intents and purposes, control the Canadian Wheat Board. You are going to tell me that I'm exaggerating, but that is not outside the realm of possibility.

Getting back to inclusion, the group that testified before you, the United Grain Growers, said it was concerned about the impact of the inclusion clause and your objections seem to be equally deep-rooted. Earlier on in your submission, you suggested that this clause be removed. I was struck by something the previous group said in their brief and I quote:

The presence of the inclusion clauses will put a damper on investment. Companies will be reluctant to invest in processing facilities, where the underlying commodity is at risk of being included under the Board.

If I understand correctly, private interests would be afraid to invest in canola, for example, for fear that in the foreseeable future, canola production could be included under the Canadian Wheat Board's mandate. If this were to happen, they would be forced to deal with the board. Investors are apparently worried about this. Have I understood your position and that of the group that preceded you clearly? If so, could you clarify your position for my own benefit and perhaps for the benefit of my colleagues?

[English]

Mr. Larry Maguire: As was pointed out by the previous speakers, it would certainly put a cloud of uncertainty over the industry in relation to being able to deal directly with the people who are growing the product to process it. The processors would not be able to attract it directly. They may have to do so, as occurs with wheat at present.

I have to sell my wheat to the wheat board, buy it back at their world price, and then sell it to a processor, unless I process it on my own farming operation, or combine with others to do it in a cooperative manner. Then there are restrictions on where that product can be sold. Those kinds of uncertainties certainly don't lead to clear investment decisions to be made by other players in other industries.

An example is wheat. There are about eight durum mills in North Dakota and none in Manitoba and Saskatchewan anywhere near the same kind of volume. Some of them are cooperatively run by farmers and some of them are run by multinationals. All are quite successful. They're buying our Canadian wheat, and they're moving some of it down.

There is a new plant proposed for Ames, Iowa, right in the heart of corn and bean country. The durum was going to have to come from Moose Jaw. We don't understand why that has to be like that in the future, and why more of those are not being attracted.

Companies are building lots of inland terminals in southern Manitoba at the present time, so that they can export products out of our area into those areas. So we're exporting the jobs as well.

That's why we feel there is a cloud of uncertainty in that whole area. We would also be surprised if you support this bill, because of the implications the bill may have for including crops from other areas of Canada under a truly Canadian Wheat Board. In fact, Quebec or Ontario wheat may some day be sold under a monopoly that would in fact be included under the kind of monopoly we have in western Canada, instead of having it move more toward the kind of organization they have in Ontario.

[Translation]

Mr. Jean-Guy Chrétien: Thank you, Mr. Chairman.

[English]

The Chairman: Thank you very much. We'll now go to Mr. Proctor for five minutes.

Mr. Dick Proctor: Thank you, Mr. Chair.

Gentlemen, good morning. I wanted to stay with the inclusion discussion. Mr. Maguire, I believe that in your opening statement you said the inclusion of grains would run counter to our trading agreements. Could you expand on that for me, please?

Mr. Larry Maguire: Yes. It's our understanding that companies that can prove some kind of financial hurt due to a change in management of these kinds of crops could in fact apply for compensation from the Canadian government if they have been impacted by a change in the marketing venue.

The government is very well aware of this. Therefore, we don't believe it's in the best interests of taxpayers to have to come forward and foot the bill for these kinds of compensation, perhaps to foreign multinationals, or our own domestic suppliers or processors.

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It's certainly not in the best interests of the farmers, who rely on our foreign customers buying that product, because they have other alternatives. There are other countries where they can go to purchase products.

I'm thinking particularly of canola. Australia is growing more canola. Some of that is because we were seen as an unreliable supplier and transporter off the west coast a few years ago.

The United States is growing more. There is more south of where I farm in North Dakota. In fact, they have doubled the amount of canola production they have this year.

So there are more options for the customers of our products to go elsewhere and buy it if they don't feel comfortable with the kinds of mechanisms we have for their attaining the product today.

Dr. Paul Earl: Mr. Proctor, the whole point we make right at the beginning of our brief is that the direction of reform has been away from state trading agencies, away from monopolies, and towards an open market. That is true throughout the world.

This bill, in this form, is signalling to all our trading partners that we're moving backwards. We're enhancing, strengthening and preserving the monopoly and monopoly powers. Instead of moving forward on the kinds of reforms that have been going on for 10 years, we're now being placed in a position where we have to defend an expansion of this monopoly rather than moving towards reforming it.

So that's a big reason why we suggest these trading matters are issues.

Mr. Dick Proctor: The other area is the removal of barley. You alluded, of course, to the vote that was held last winter. You said that 40% of farmers clearly said they didn't want it, and therefore we should get rid of it. But that means that some 60% of farmers said we should stay with it.

I mean, we live in a democratic world. The folks opposite got about 40% of the vote this time. They're the Government of Canada. Monsieur Chrétien would have wished they'd got another 0.5% in Quebec two years ago this month, but they didn't, so they're still a part of this country.

I guess I'd just like to have you expand on why you think 40%—in effect, a minority—should rule as the majority in this area.

Mr. Larry Maguire: I guess that's why we feel strongly when we make that comment, that it's imperative that farmers be allowed to vote in these processes according to their stake in the industry. When I was on the advisory committee, it was very clear that 20% of the farmers produced 80% of the grain. I was on the committee that actually developed the new contracting mechanism for farmers in western Canada, and it's now working pretty well.

The rules we saw in those days were 80%; it's the straight economic rule. From that, you can certainly extrapolate that approximately 70% of the barley in western Canada would want to be sold on a free market today—and that included malt barley, in spite of the loaded question.

We're not going to sit here and say that you could translate that directly into wheat, but we know there's a concern out there. We are an organization representing wheat growers, as well as these other products, because many of our farmers grow them. So that's why we feel so strongly about taking out the inclusion clause.

Dr. Paul Earl: There is another point I just made. The thing is that in a commercial arrangement like this you cannot preserve the status quo in the face of that level of discontent.

We thought the Western Grain Marketing Panel grappled with this issue very well and came up with some sound recommendations. Those were ignored and set aside, and we're now back to something that in fact entrenches us and preserves the status quo.

But you can't do it. If you think this bill is going to settle the discontent in western Canada, it isn't. It's going to make it worse in the long run.

The Chairman: Thank you, Dr. Earl.

Mr. Borotsik.

Mr. Rick Borotsik: Thank you. Again, this is for five minutes with brief answers, okay? I know Mr. Maguire very well, and perhaps one question could be five minutes.

I would like to ask something very quickly on exclusion and inclusion. Mr. Goodale sat here and suggested that we, as this committee, should listen to the opinions of the people—the producers and processors—that are put forward and carry those to the minister.

On inclusion, the answer I got was that the only reason inclusion is here is because, if you have exclusion, inclusion is necessary. Would the opinion of your organization be that both should be out of this legislation, or simply inclusion should be out of the legislation?

Mr. Larry Maguire: We have taken the view that the inclusion should not be part of the legislation. It was not discussed. It was put in at the last minute in the session last spring—a year ago—when many of your members travelled in western Canada, and it is not necessary. No one is asking for it.

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Mr. Rick Borotsik: Is exclusion necessary in the bill?

Mr. Larry Maguire: We need to be able to look at ways of having a choice in how grain is marketed. If in fact it really isn't necessary to have that exclusion there.... But you do need to have a mechanism.

That's why we say in our report that perhaps these all-or-nothing questions are not what should be asked. Let's find the process that will allow us to market these products the way farmers want them to be marketed.

Mr. Rick Borotsik: I want to touch on something Dr. Earl had said, that this legislation will not settle the issue in western Canada. I couldn't agree with you more. This is certainly a heated issue.

I'll extend that a little bit. Is it going to deal with or settle the issues with respect to external trade issues? We have a WTO coming up in 1999. Could I have your opinion on it. How is that going to be viewed with respect to this particular piece of legislation?

Mr. Larry Maguire: I'll let Dr. Earl answer that.

Dr. Paul Earl: I think the answer is that it's going to jeopardize our position in the WTO negotiations. The fact is that we know state trading organizations are going to be an issue. We've put forward a piece of legislation that enhances and strengthens the status quo. It's the wrong signal, and we refer specifically to the issue of malt pricing. That could well be a trade issue.

Mr. Rick Borotsik: You piqued our curiosity with a 25% trading opinion on futures. In your estimation, Dr. Earl, does this legislation allow the board to implement that type of futures option?

Dr. Paul Earl: I think the issue of whether it does or doesn't is irrelevant. What we've said is that timing is of the essence. We know it's going to be fractious and involve contentious elections. We know there are going to be fights in that board, and fights over that board.

That's why we've said to put it in the legislation. If you want to try to provide farmers in western Canada with risk management tools and you want to try to settle some of the turmoil, put it in legislation and make it mandatory to do it now.

Mr. Rick Borotsik: We should make it not optional but mandatory?

Dr. Paul Earl: Absolutely.

Mr. Larry Maguire: Certainly there may only be a very small portion of farmers out there today who would use this option that we're suggesting as well.

Mr. Rick Borotsik: That was my next question, Mr. Maguire. On your other commodities, your canola and flax or whatever else you grow, do you utilize these types of risk management options in the other operation?

Mr. Larry Maguire: Every day.

Mr. Rick Borotsik: And do most producers use those options?

Mr. Larry Maguire: Many of them do. Many do not use the futures market. That's why I'm saying there may only be a small portion used of what we're suggesting in wheat. But they do a lot of deferred delivery contracts where they may contract the cash price of that product, say, in the spring of the year, or right now for next fall.

Mr. Rick Borotsik: I still have a minute left, Mr. Chairman. I'm looking at the clock.

You talked about the durum processors in North Dakota. We have a number of oilseed crushing plants right now in western Canada. If in fact through some convoluted process your oilseeds were on part of the monopoly side, do you see those operations, the crushing plants, leaving western Canada?

Mr. Larry Maguire: Well, they've made major investments in those at the present. Some of them are only a year or two old and—certainly I didn't make the point in response to Mr. Chrétien's question—they have been established under an open market.

Mr. Rick Borotsik: That's why I asked the question.

Mr. Larry Maguire: It's very reluctant. You don't see them coming forward wanting the inclusion clause.

Mr. Rick Borotsik: If there was—

Dr. Paul Earl: The Canadian Oilseed Processors Association has said that this would jeopardize them. There's the expertise.

Mr. Rick Borotsik: I'm sure we'll get that from the horse's mouth.

If there was an open system and an open market on durum right now, do you believe there would be more processing of wheat flour in Canada, as opposed to what there is now?

Mr. Larry Maguire: Yes, we believe there would be more opportunities for that. Canada and the U.S.A. are trying to establish a durum contract between Winnipeg and Minneapolis at the present time, and the wheat board does hedge some of its domestic sales, at least, against Minneapolis and Chicago.

Mr. Rick Borotsik: Just for my information, did you say Saskatchewan got rid of their pork marketing board?

Mr. Larry Maguire: The day before yesterday.

Mr. Rick Borotsik: Thank you very much for that information.

The Chairman: Mr. Byrne, we have three minutes.

Mr. Gerry Byrne: Thank you very much, Mr. Chairman, for the three minutes.

An hon. member: Oh, oh!

Mr. Gerry Byrne: I just want to clarify a couple of points. With respect to your presentation, I was left a little confused about the whole democratic process and your vision of the democratic process.

My colleague opposite mentioned the fact that through our work in reviewing this legislation, you would have this committee remove barley from the jurisdiction of the Canadian Wheat Board. You would have us do so under a 40% mandate, meaning 60% of farmers who were involved in the vote didn't agree with the suggestion. I'm just wondering how that relates to...because you've also raised the question that you want us to become politically engaged, in contravention of a democratic process, but you want us to depoliticize the Canadian Wheat Board. Could you give us some comments about that?

• 1030

Mr. Larry Maguire: We're saying the board should be elected as a voluntary board, Mr. Byrne. That's where we're coming from.

We're not using just that example. The number was actually 37%, by the way. In Alberta the plebiscite for marketing choice was 66%. As you're aware, a study by the Saskatchewan government showed more than half. The Manitoba government was in favour of the Western Grain Marketing Panel. The minister's own question was very.... I think the industry was very surprised to find 37% of the farmers did not want the board to handle malt barley, which was basically why the question was asked that way.

We would like to see a voluntary board. To make our position clear on barley, we just asked for a choice on barley. But it's the maltsters in the industry that are saying it can't be one way or the other. With this volume of barley, as I've outlined earlier, wanting to be on the open market, we're suggesting the only way to go is to take barley out.

The board handles very little barley now, and it will handle continuously less in western Canada. Because of the restructuring of the Crow benefit, the freight movement out of the prairies, nobody will be exporting feed barley out of western Canada, at least not very much, in the future, particularly through the monopoly.

I would say too that in relation to guarantees on initial prices one of the problems the board or the government may have is that if you're going to guarantee that price, then the same thing may happen as happened this year: the board simply comes out with a very low initial price in relation to what the industry is looking at. Is that in the best interests of farmers? We don't think it was a very good market signal for farmers to run their operations, particularly in looking at the acres of winter wheat and fall rye grown this particular year.

Mr. Gerry Byrne: But just to get the spirit of your intent, if 37% is sufficient justification to get out of a particular commodity, is 37% enough to get in?

Mr. Larry Maguire: All along through our presentation we have said you should be consistent with what is happening in Ontario. Farmers in western Canada have no reason to trust the votes now. One was even planned for Ontario this fall, and it was cancelled. If we had the same rules in place in western Canada as took place in Ontario, or were to take place in Ontario, we would already have a dual market for barley in western Canada. So we certainly concur with the rules the Ontario marketing board council has put in place at present.

The Chairman: I want to thank you for your presentations and a very good discussion.

I anticipate your ancestors weren't allowed out of Ireland voluntarily.

Mr. Larry Maguire: Absolutely not. They were in southern Ontario, northern Ontario, and Manitoba.

The Chairman: Thanks for coming.

I would like to call on Marvin Shauf, Brian Saunderson, and Patty Townsend, from Prairie Pools Inc. We'll ask for a ten-minute presentation and we'll then go immediately to questions for the members.

Mr. Marvin Shauf (Vice-Chairman, Prairie Pools Inc.): Thank you, Mr. Chairman.

Mr. Chairman and members of the committee, I want to thank you for the opportunity to meet with you today. My name is Marvin Shauf. I'm vice-president of Prairie Pools Inc. I'm also a vice-president of Saskatchewan Wheat Pool. With me today is Brian Saunderson, a director of Prairie Pools Inc. and also a director of Manitoba Pool Elevators. Patty Townsend works in Ottawa at the PPI office here.

The Chairman: We've seen her around.

Mr. Marvin Shauf: Alberta Wheat Pool sends its regrets. This time of the year is very busy for cooperatives as we prepare for annual delegate meetings. Much of that preparation involves meetings of our members in the country, and that is what is happening in Alberta at the present time. But I want to assure you that Alberta is in full support of the submission that we're making, that we've presented to you.

• 1035

As you know, Alberta Pool, Saskatchewan Pool and Manitoba Pool elevators work together as PPI on issues of common concern. The comments we make today are on behalf of all three pools.

I'm sure that most of you are quite familiar with the pool and Prairie Pools, but I would like to introduce our organizations again.

Alberta, Manitoba and Saskatchewan Pools are amongst Canada's large farmer-directed cooperatives. Together we have over 100,000 farmer member-owners. We handle over half of the grain, oilseeds and special crops delivered to the country elevator system, and we employ more than 5,000 Canadians. Together, the pools operate more than 700 country elevators. Individually, together or as part of larger consortiums, we own terminal elevators in the port of Vancouver, Prince Rupert and Thunder Bay.

The pools and our joint exporting company, XCAN Grain Pool Ltd., act as agents of the Canadian Wheat Board in many countries around the world, and we believe the partnership that exists between the pools and the Canadian Wheat Board is in the best interests of our farmer member-owners.

We are also very actively involved in the processing of prairie grains, oilseeds and special crops. We have interests in Canada's largest oilseed crushing and processing company and western Canada's largest livestock sales operation. The pools are involved in milling, malting, baking, the production of ethanol, fertilizer and chemical formulation and distribution, insurance, publishing and more.

We've provided our brief to you in advance and I'm sure you all have it.

Where we have concerns with Bill C-4, we have tried in our brief not only to point out the concern but also to make constructive proposals for change. We won't be reading our submission in its entirety. Instead, we want to present the highlights and spend some time talking with you about our proposals.

The pools recognize the value of the Canadian Wheat Board to prairie wheat and barley producers. In particular, the three main pillars of the Wheat Board—marketing, single-desk selling, price pooling and government guarantees—are as valuable to producers today as they were when the board was established more than 50 years ago. However, we also recognize that the world is changing and our marketing institution has to adapt to capture the opportunities presented by the change. We support the government's policy goal, which, to paraphrase, is to build on the proven strength of the Canadian Wheat Board system while at the same time enhance its accountability to producers and improve its responsiveness to producer needs. We think Bill C-4 is a positive step towards achieving those goals.

Some of the changes made during the last session of Parliament helped to improve the bill significantly, but it still needs some fine-tuning. Our submission focuses on two main themes: first, the goal of increased accountability to producers and, second, improving responsiveness while at the same time strengthening the three essential pillars of Canadian Wheat Board marketing.

First, the very important issue of accountability.

We understand that because the credit borrowings and initial prices of the Canadian Wheat Board are guaranteed by the federal government, the wheat board has to be responsible to Canadian taxpayers for its financial operations. Bill C-4 provides that responsibility through the requirements for the submission and approval of annual corporate plans and the requirement for the minister, and in some cases the cabinet, to approve financial decisions. However, the bill still has a way to go to provide the required accountability to farmers.

To provide additional accountability, elected directors should have a formal mechanism to report to and communicate with farmers. We are pleased that Bill C-4 establishes a board of directors where the majority of members will be elected by farmers. This provides farmers with a real opportunity to influence the directions of the Canadian Wheat Board. We also support the decision to go directly to an elected board of directors rather than an interim board on appointment.

We have suggested that all of the positions be filled with the first election to ensure that all terms won't expire at the same time. Five of the directors should be elected for a two-year term and five for a three-year term. After the first election, all directors could be elected for a three-year term, as is specified in the bill.

• 1040

We agree that all the positions on the board of directors should be part-time. Not that we say all the positions should be part-time. While we support the appointment of a full-time CEO, or president, as the position is called in the legislation, we don't think the president should be a member of the board of directors. For virtually all farmer-based businesses, the chief executive officer is fully accountable to the board but not a member of the board.

We have heard the government's contention that it should retain the ability to appoint the president because of the financial risk of guaranteeing initial prices, credit, and borrowings. However, as I said before, the bill provides more than ample protection for taxpayers. What is missing is accountability to farmers.

The president must be fully accountable to the board and, through the board, to farmers. A president appointed by the government may feel more accountable to government than to the board of directors. We urge you to recommend that the appointment of the president rest with the board of directors. Through its five appointed members, the government will have input to the appointment process.

In our submission we have suggested changes to the wording of Bill C-4 to address our concerns. I would like now to turn to Brian Saunderson to talk about the second theme of our submission: increasing flexibility and responsiveness while maintaining the pillars of Canadian Wheat Board marketing.

The Chairman: You have three minutes.

Mr. Brian Saunderson (Director, Prairie Pools Inc.): I'll try to talk fast. It's a pleasure to be here, Mr. Chairman and committee members.

The board system is built on three main pillars, which my friend Marv has referred to: single-desk selling, price pooling, and government guarantees. Single-desk selling allows farmers to concentrate their marketing powers in the international marketplace. Price pooling allows farmers to take advantage of all sales opportunities—premium sales and those subsidized by our competitors—and to share returns. We don't use export subsidies in Canada. Pooling is one of the ways farmers can compete with those who do. And government guarantees provide stability for farmers.

Some of the provisions in Bill C-4, such as giving the wheat board the ability to make storage payments to producers, tradeable producer certificates, and allowing the board to use risk management tools, are positive. They help to provide flexibility and improved responsiveness and also to strengthen the three pillars of wheat board marketing. However, we need to point out that some of the things in the bill, as it is currently written, will unnecessarily jeopardize the three pillars.

First is the proposal to remove the government guarantee of adjustments to the initial price. The government says the removal of guarantees will allow the wheat board the make more timely adjustments to the initial price and get money into farmers' hands more quickly. While we appreciate the goal, we think it would be better achieved by simply requiring that adjustments be approved by the minister and the Minister of Finance.

There's never been a deficit in the pool account caused by initial price adjustment, so the financial risk to the government is virtually non-existent. However, there's a very real risk that the withdrawal of the adjustment guarantee could pave the way to a total withdrawal of the initial price guarantee in the future.

PPI is very concerned with the provisions of Bill C-4 that give the Canadian Wheat Board the power to make cash purchases of wheat and barley directly from farmers. Cash purchasing, in our opinion, would increase the potential for deficits in the pool account, result in more conservative initial prices, and reduce the attractiveness of price pooling. The result would be a demise of the price pooling pillar of wheat board marketing. As farmer-directed cooperatives, we'd be remiss if we didn't point out our concerns about cash purchasing from that point of view.

The grain acquisition system in the prairies complements the wheat board marketing system. The efficient collection of supplies allows the board to focus on marketing. However, if the board is given the ability to acquire grain from farmers, it could ultimately affect the configuration of the country's elevator system. That would not only affect our investments in facilities but could ultimately reduce farmer delivery options.

We understand there's a need to get as much money as possible into the hands of farmers as soon as possible. Provisions in Bill C-4 such as shorter pooling periods and especially tradeable producer certificates would accomplish that goal without jeopardizing the pooling system.

Having stated our argument for the maintenance of government guarantee of initial price adjustments and against cash purchasing, we've addressed both the government's reasons for the establishment of the contingency fund. Given that farmers are already overburdened with check-offs and user fees, and given that there's no need for the fund, we are stating our opposition to the establishment of a contingency fund and asking that the clauses of the bill that provide for such a fund be removed.

• 1045

At the very least, if the government doesn't agree with our suggestions and wishes to establish a contingency fund, we must insist that it not be created with producers' money. If a fund is to be built, it should be done with a one-time injection of government money in an amount sufficient to cover the risk.

I'll turn back to Marvin.

Mr. Marvin Shauf: A new addition to Bill C-4 is the so-called inclusion clause, which would allow the governor in council to extend all or a part of the Canadian Wheat Board Act to other crops. The way the clause is worded causes us some concern. It could result in what could be called frivolous requests for inclusion. This would not only place the minister in the difficult position of deciding who represents producers, as well as increasing the potential for legal disputes, but would also result in uncertainty for the customers and current exporters of other crops.

The wording in that clause of the bill needs to be tightened up to ensure that only the organization that can demonstrate that it is the predominant one representing producers of the commodity should be able to request an extension. We have suggested some words in our submission.

We realize we've taken quite a bit of time to explain our concerns, but the committee provides an excellent opportunity to make Bill C-4 legislation right for prairie farmers, so we wanted to ensure that our input was thought out and thorough.

In summary, we want to make it clear that the pools support the goals behind Bill C-4 and find most of the legislation to be a step in the right direction. However, once again, we have to stress that the fundamental pillars of Canadian Wheat Board marketing—single-desk selling, price pooling, and government guarantees—are just as important now as they were when the board was established. They must not be jeopardized.

Thank you once again for the opportunity to provide our suggestions for fine-tuning this legislation to ensure that it best serves prairie farmers.

The Chairman: Thank you, Mr. Shauf, and thank you for providing us with your presentation ahead of time so we could have it overnight to study it.

We'll go to Mr. Breitkreuz.

Mr. Garry Breitkreuz: Thank you very much; I appreciate your coming before the committee.

We actually have a lot of questions, but probably time will not allow us to ask all of them. I'll get to some of the key ones that farmers in my area are asking me to present to this committee.

How do you feel about prairie farmers being treated so differently from their counterparts in the other provinces? I'll give you an example and let you comment on it. You're probably very well aware of the statutory declaration that farmers in the other seven provinces can make in regard to exports, which prairie farmers cannot do. With that statutory declaration, they can export their wheat, and there's no charge for that. How do you feel about that? Prairie farmers do not have access to that.

Mr. Marvin Shauf: Prairie farmers have the ability to put their resources together and market through a single desk. It's something that's worked very well for prairie farmers for a large number of years, and with some fine-tuning, it has the ability to continue to work very well for producers on the prairies into the future.

Mr. Garry Breitkreuz: But I'm getting at the equality aspect of it. Why should they not have the same rights as farmers in the other provinces?

Mr. Marvin Shauf: It's probably partially addressed in where the prairies lie, in being able to put their efforts together and market collectively. I don't think it's a rights issue; I think it's an intelligent marketing tool that prairie farmers have access to.

Mr. Garry Breitkreuz: Are you referring to the fact that they're landlocked in regard to their geography?

Mr. Marvin Shauf: That's only part of it, but prairie producers have found a strength in marketing through the Canadian Wheat Board.

Mr. Garry Breitkreuz: With all due respect, I really don't think you're answering my question. Why should somebody in British Columbia or Quebec have the right to export their grain without charge, but not those in the prairies? I don't think you're getting at the nub of what I'm asking you.

Thank you. I'll share my time with Mr. Benoit.

Mr. Leon E. Benoit: I'd like to pursue this issue of single-desk selling and your support for the continued monopoly of the board. I know the whole cooperative philosophy was based on a voluntary system, especially cooperatives in grain marketing. One of the basic requirements of having a cooperative was that it would be voluntary. People that chose to market through the cooperative could, people that chose to be in the pool would be in the pool, and those that chose not to could operate outside.

• 1050

I'm just wondering when the pools moved from that philosophy, and when the members decided that in fact there shouldn't be a choice in terms of marketing through the wheat board—that the voluntary aspect shouldn't be there. Was there a vote? Have the pools all taken a democratic vote of their members, where the members decided that they would throw aside that voluntary aspect of pooling, or was this a change that was just made somehow along the way?

Mr. Brian Saunderson: If the sands are shifting, as you sort of suggest they are, on producers' feelings about that, then we can only applaud this move to an elected board of directors with two-thirds. That will be the vehicle that will address farmers' needs, if their expectations of the board are changing. I don't think the parameters of the bill go as far as you'd like them to, obviously, but perhaps an elected board of directors will address the changing needs of farmers.

Mr. Leon E. Benoit: My point was that farmers started with a voluntary board. The whole pool movement, or the cooperative movement, was based on being voluntary. Now you're coming here as representatives of the pool saying, we want a monopoly maintained. That goes against any of the philosophies the pools were based on. I'm wondering when the direction was given by the membership to support a monopoly position.

Mr. Marvin Shauf: If you go back in history, you'll see that there were decisions made to market collectively. That decision has been reinforced in more recent votes. We in the Prairie Pools have experimented with voluntary pooling, and it doesn't work. When prices are moving upward, people will walk away from it. When pricing are running down, they will come back for the guarantees. You can satisfy neither your customers nor the people who want to deliver to it. We've tried it on numerous occasions, and there is no way of providing that in the long term.

Mr. Leon E. Benoit: I disagree with that assessment that the voluntary pooling hasn't worked. I believe historically it has, even in barley marketing, where we've had the dual market domestically.

The Deputy Minister of Agriculture, Mr. Migie, when they were witnesses here earlier in the week, indicated that there would be no obstacle to this partially elected, partially appointed board of directors deciding, if they chose, to remove classes of grain from board jurisdiction. They indicated that could be done—that there would be no obstacles in the way of the board deciding to do that and carrying through on it. In theory, they could remove all grains from the board's jurisdiction, if they so chose. This was the definite impression given—in fact, this was the statement made by the deputy minister, Mr. Migie.

Do you believe this legislation really would accommodate that kind of change if the board decided they wanted to do that? I want to just say that it's unfortunate that this legislation doesn't allow for a voluntary market where we could have grains handled by the board as well as outside the board, but it just clearly doesn't accommodate that. But the minister did say this change could be made where grains could be excluded.

Ms. Patty Townsend (Manager, Communications and Public Affairs, Prairie Pools Inc.): I think it does accommodate a voluntary pooling system as well. The exclusion clause would allow the government, by order in council, to exclude any grain that's currently under the board from any section of the Canadian Wheat Board. This means you could exclude a crop from the single-desk selling function, but could still include it in pooling, which would essentially make it a voluntary pooling system.

Mr. Leon E. Benoit: That's what the minister said. But in practical terms, do you think that could be carried through, the way this structure is set up in this legislation?

Ms. Patty Townsend: Yes, it could, because you have an elected board of directors that takes direction from farmers—or at least a board with a majority of elected producers—who could recommend to the minister, who would act on that recommendation and a vote of farmers.

The Chairman: Thank you. I know you promoted Mr. Migie there, but I'm sure he'd be glad to hear that he's deputy.

Mr. Leon E. Benoit: Oh, no. I was talking about the two of them, actually.

• 1055

The Chairman: Mr. Chrétien, seven.

[Translation]

Mr. Jean-Guy Chrétien: I have some questions about four points. You touched on one of them, namely inclusion, in response to Mr. Benoit's question. However, before I continue, I would like one clarification. You stated earlier that your organizations had 100,000 members. That's a great deal of people, but is it possible for the same producer to belong to three, four or five different cooperatives, which would mean that instead of 100,000 people, you actually represent only 40,000?

[English]

The Chairman: Mr. Chrétien, we're having some problem here with translation. Something is not working.

[Translation]

Mr. Jean-Guy Chrétien: Would you like me to put my question again, Mr. Chairman?

The Chairman: Yes.

Mr. Jean-Guy Chrétien: I would like you to clarify for me the total number of members you have. At the beginning of your presentation, you told us that you had a combined membership of 100,000. That's a lot of people. Before I continue, I would like to know if it's possible for the same grain producer to be a member of four or five different cooperatives, which would mean that instead of 100,000 members, the actual number would be closer to 50,000 or 60,000 different grain producers.

[English]

Mr. Brian Saunderson: I think the figure of 100,000 was the combined membership of the Manitoba Pool, Alberta Pool and Saskatchewan Wheat Pool, so it doesn't reflect the numbers we have individually. That's the combined membership. There's nothing restricting a farmer near the border of one of the provinces from being a member of one pool and a member of the adjoining province's pool. There's no restriction on that.

Ms. Patty Townsend: Excuse me, but I should just point out that the numbers are the number of active members. The number of people who actually own shares is much higher. The people who patronize the pools are counted against their shares, so there's not too much overlap there at all. That 100,000 number is quite conservative.

[Translation]

Mr. Jean-Guy Chrétien: Let me give you an example. I'm sure that will make my colleague, Mr. Coderre, happy. Suppose I'm a member of six different caisses populaires. When someone says that in Quebec, there are 6 million caisses populaires members, that means that they count me, Jean-Guy Chrétien, a total of six times. I'm still only one person, but I cannot participate in six general meetings. If the Mouvement Desjardins were to hold a general vote, I trust I would be entitled to only one vote.

Therefore, I was wondering if there are in fact 100,000 different producers, or really only 60,000, or 99,000? The witness said that there was not much overlap.

None of the three witnesses focussed on the election process in his presentation. A previous group recommended that three members be elected in Manitoba, five in Saskatchewan and three in Alberta. You, on the other hand, made no recommendation as to who should be qualified to vote. Could you briefly address that issue, as I have other questions that I would like to ask you?

[English]

Mr. Marvin Shauf: We feel that producers involved in production of the Canadian Wheat Board grains—permitbook holders—should have access to a vote, and it should be divided into areas by volumes of production and numbers of producers.

[Translation]

Mr. Jean-Guy Chrétien: So, in your view, production is an important factor. Someone who produces 100 times more than another person would be entitled to 100 times more votes, just like a stockholder.

• 1100

[English]

Mr. Marvin Shauf: No, we wouldn't propose it be a weighted vote, other than that there would be more producers involved in larger production areas. Really what we're suggesting is that you would need a permit book to be the qualification for whether or not you got a vote, and if you had a permit book, then your vote would have as much weight as did someone else's vote.

[Translation]

Mr. Jean-Guy Chrétien: You would apply the same principle that cooperatives use, that is one person, one vote.

[English]

Mr. Marvin Shauf: That's correct.

[Translation]

Mr. Jean-Guy Chrétien: You suggested that Bill C-4 be amended so that the CEO is appointed by the board of directors, but does not actually sit on the board. Therefore, he would be the 16th member. Have I understood you correctly?

[English]

Mr. Marvin Shauf: We're suggesting that the CEO, or the president, not be a member of the board. We would see a 15-person board, but the CEO, or president, would not be a member of that board but an employee of the board.

[Translation]

Mr. Jean-Guy Chrétien: Would we then have a 13-member board, or a 17-member board? Of course, the president and the CEO will be attending meetings. Would you have a 15-member board of directors, in addition to the two, non-serving members?

[English]

Mr. Marvin Shauf: No. We would see a 15-person board in total, one of which would be the chair of the board. The CEO, or president, would be an employee hired to manage the affairs of the Canadian Wheat Board. He would attend the board but not be a member of that board. He would be directed by the board of directors to manage the organization. That's really the style that all three prairie pools operate under.

[Translation]

Mr. Jean-Guy Chrétien: My final question relates to cash payments. I'm happy that you're the first group to testify. This is the first full hearing that we have had with witnesses on Bill C-4 and the two first groups were not very favourable to this bill. I see that in your submission, you have made several suggestions, although you do support the main thrust of Bill C-4.

Among other things, you express some reservations about cash payments. Personally, if I were a grain producer, I would like to be paid in cash. You don't really agree with that and you list the reasons why. I'm thinking about my colleagues from Quebec who produce maple syrup and who appreciate receiving payment in cash on delivery, perhaps not full payment, but at least partial payment, say 60 per cent.

Could you explain to me briefly why you are opposed to cash payments?

[English]

Mr. Brian Saunderson: Similar to the sugar producers that you are familiar with, our producers also get an initial payment, which can be probably higher than the 60% of the realized net return by the end of the pooling period. So that is a comparison, just as you suggested.

Just to expand a little bit on some of the dangers we see in cash purchasing, when the demand was made to have that vehicle, it was designed to be able to attract grain stocks when the wheat board had sales and insufficient grain was coming into the system, so therefore to have a cash-treating option. By necessity it would have to be higher than the initial price, or the adjusted initial price, to attract grain.

So we feel that by having a higher price out there, some producers could hold back production to try to precipitate the wheat board using that vehicle. By so doing, less grain would be committed to the contract system of the wheat board, which is into the pooling system. And with less grain in the pooling system, the pooling would be jeopardized as to the returns it could actually realize in the marketplace.

• 1105

The Chairman: Thank you very much.

We go now to Mr. Calder.

Mr. Murray Calder: Thank you very much, Mr. Chairman.

On page 7 of your brief, I'd like to go to the inclusion-exclusion clause. As I said before to the previous presenters, it's a balance. If there's a clause that is going to exclude a commodity, and that commodity is outside the board and wishes to get back in again, my question would be how are they going to get back in if there is not an inclusion clause?

You have put forward here an amendment to proposed section 47.1, which used to be the old section 26, and quite frankly, I like it. It cleans things up a wee bit, because you're working towards answering two questions that I posed earlier this week.

First, who represents a producer group? How is that established? Who represents the canola growers of Canada? And one of the previous presenters posed the question: if it takes 37% to get out, does that mean all it would take is 37% to get back in again? So my other question would be what percentage would represent the majority of that producer group? I'd like your comments on that.

Mr. Marvin Shauf: Our policy has been that producers should decide how their production is marketed, through what system. It's difficult to speak to exactly what percentage of people should be able to make this kind of decision. It seems to me that when 50% of people want to have their grain marketed through that kind of system, that gives you a majority. If you go for two-thirds, it's a very strong mandate.

I don't think I would try to tie it down to a tighter statement than that today, because our policy has been that a majority of producers should be able to determine their own marketing system.

Ms. Patty Townsend: We wrestled a lot with the wording on the inclusion clause, because it's very difficult for the minister or anybody to determine what organization truly represents the majority of producers.

Putting in the word “predominant”—you have to demonstrate that you're the predominant organization—was as close as we wanted to get, because you have an awful lot of farmers out there who don't belong to some organizations. If the canola growers only represent 40% of the producers, right now they're still the only organization that represents the most canola producers.

It was really hard to put in a percentage, and I don't think the minister or the government would want to be tied to a percentage for membership in an organization requesting inclusion.

Mr. Murray Calder: Okay.

The Chairman: Are you in favour of the inclusion clause?

Mr. Marvin Shauf: We're not opposed to the inclusion clause, because it proposes a mechanism that would allow producers to have a voice in whether or not their product is included in the Canadian Wheat Board marketing system.

The Chairman: Therefore you're in favour of the inclusion clause.

Ms. Patty Townsend: We're not opposed to it.

Mr. Marvin Shauf: We're not opposed to it, no.

Some hon. members: Oh, oh!

Mr. Marvin Shauf: We're in favour of producers being able to choose how they market their production.

The Chairman: Okay. Mr. Proctor.

Mr. Dick Proctor: Thanks very much.

In the area of governance, I want to try to get in three quick questions, if I can. Can you talk a little bit about the staggered elections? We heard from Minister Goodale on that earlier this week. Does Prairie Pools have a view on that?

Mr. Marvin Shauf: It's in the statement. We suggested that half of the board be elected for a two-year term and half for a three-year term so that the whole board is never up for election at one particular time.

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Mr. Dick Proctor: Mr. Goodale had thrown out a suggestion about a one-year term, possibly. That didn't resonate well with me, so I'm glad to hear from you—I assume it's for the same reason—that one year is just not a sufficient time to get established. That's why you'd go to a longer one.

Mr. Saunderson, you talked about the contingency fund in the brief and thought it would be more effective than a one-time injection. Do you have any sense of how much money we'd be looking at to have a viable contingency fund?

Mr. Brian Saunderson: I guess I preface that statement by saying we don't believe the contingency fund is needed, but if the government insists on having it, we suggest it be one-time government money.

I guess it would have to depend on what purpose it is there for. We expressed our opposition to cash trading, and we expressed our opposition to withdrawing the guarantee of adjustment fund, yet that is what the contingency fund is supposedly for. So it's hard to answer that question, based on what it is supposed to do.

Mr. Dick Proctor: Both of the groups we heard from this morning were strongly in favour of voluntary competition with the single-desk selling. In your view, can the wheat board survive as a voluntary organization if it went that way? I know that one of the pillars is the whole area of the single-desk selling of wheat and barley at this time. Could it survive in a more voluntary arrangement?

Mr. Brian Saunderson: I believe it's our view—it's definitely my view—that, no, a dual market scenario would lead to the demise of the wheat board. For example, grain companies would often be in opposition to the wheat board in acquiring stocks. But as Marvin pointed out in simplistic terms, farmers will definitely go for an open market when it's a bull market and they'll opt for a pooling in a declining market. We really think you have to walk one way or the other.

Mr. Dick Proctor: That's fine.

Mr. Brian Saunderson: Perhaps I could add one more comment to the contingency fund issue. We pointed out that the grassroots opinion in the country is that they're tired of check-offs and they're tired of user pay coming off their bottom line, which by the way is declining this year. Whether you take a contingency fund as check-off at the elevator or whether it's out of the final payment pool to producers or out of returns made on the finance market, it still comes out of producers' pockets.

Mr. Dick Proctor: So the contingency fund would be just one more of those check-offs—

Mr. Brian Saunderson: Yes.

Mr. Dick Proctor: —the farmers are increasingly unhappy with. I agree.

Thank you.

The Chairman: Mr. Borotsik.

Mr. Rick Borotsik: Thank you, Mr. Chairman.

Prairie Pools, as I understand, Mr. Shauf, is very supportive of the single-desk selling method currently in place right now with the Canadian Wheat Board—very supportive. Prairie Pools and, for that matter, pools become much more free enterprise.

We talk about the diversification of Saskatchewan Wheat Pool, we talk about feedlots, retail, processing; in fact, the pools are very involved in oilseed crushing plants, as I understand. Is it then your position that canola should also be a single-desk commodity?

Mr. Marvin Shauf: Only if the producers of that commodity—

Mr. Rick Borotsik: Is it the Prairie Pools' position that canola should be a single-desk commodity?

Mr. Marvin Shauf: No, it's not. Our policy—

Mr. Rick Borotsik: You're very supportive of the single-desk commodity in wheat, so why wouldn't you be as supportive of the single-desk commodity in canola?

Mr. Marvin Shauf: Wheat has a very different market from canola.

Ms. Patty Townsend: I think it's really important to point out, Mr. Borotsik, that the pools take their direction from farmers. They do it at a delegate level, they do it at a committee level, they do it out in the country, and farmers have told them they support single-desk selling—

Mr. Rick Borotsik: I'm sorry, Ms. Townsend will take most of my time, so if I could, please....

I understand now your opinion is that you do not want single-desk selling with canola?

Ms. Patty Townsend: If farmers ask for it.

Mr. Marvin Shauf: If farmers asked for it, we would support it.

Mr. Rick Borotsik: I see. We've heard that before.

Mr. Murray Calder: It's a legitimate answer. It's not going the right way.

Mr. Rick Borotsik: No, no, it's going exactly the way I expected, thank you, Mr. Calder. There's no question about that.

You obviously do not want single-desk selling in canola unless the producers suggest they want to go single desk.

Would Prairie Pools feel it would be beneficial to their oilseed crushing processing if it were single desk? Let's get away from the farmers now and the producers. Would Prairie Pools feel it would be beneficial to your processing if it were single-desk selling? Would you prefer to buy from the board, and only the board?

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Mr. Marvin Shauf: It's difficult for me to answer that, because we haven't been in the situation, but I can look at operations that do buy from the Canadian Wheat Board, operations we're involved in. They really appreciate being able to purchase from the board, because it provides stability of supply and a stable quality, which are very important.

Mr. Rick Borotsik: Based on that, I would suggest your opinion would be you would rather have single-desk selling as an oilseed commodity.

Mr. Marvin Shauf: As I said before, though, canola is a very different market, a very different commodity. So without looking into it further, I'm not sure I would give you that answer.

Mr. Rick Borotsik: Okay.

The contingency fund, the check-off, you're not terribly supportive of. The contingency fund can be developed at any level right now. Is it in your opinion that it is anticipated that the contingency fund will eventually be used to guarantee the initial payment? That's at some time in the not-too-near future.

Mr. Brian Saunderson: There's certainly that possibility, especially if it increased to a significant level. The finance minister would sure look at it in that fashion.

Mr. Rick Borotsik: Do you believe that's the potential?

Mr. Brian Saunderson: Certainly it is.

Mr. Rick Borotsik: Do you think it's there, perhaps in the background of this particular legislation, that eventually it will be used as that?

Mr. Brian Saunderson: Yes. Taking the guarantee off the adjustment, which, as we pointed out, represents really very little, if any, risk, is just one step to getting the guarantee off the initial.... As we say, that's one of the essentials of the wheat board.

Mr. Rick Borotsik: This is my last question. Currently membership in any cooperative, whether it be Manitoba Pool, Sask Pool, or Alberta Pool, is on a voluntary basis, is it not?

Mr. Brian Saunderson: Sure.

Mr. Rick Borotsik: You can become a member of the pool, but you don't have to be a member of the pool. When in fact you're a member of the pool, can you still sell your commodities to other private sector corporations?

Mr. Marvin Shauf: Yes.

Mr. Brian Saunderson: Absolutely.

Mr. Rick Borotsik: So it's not a mandatory thing. You don't have to in fact sell to Manitoba Pool?

Mr. Brian Saunderson: No.

Mr. Marvin Shauf: But there is no parallel here to—

Mr. Rick Borotsik: I just asked a question.

Mr. Marvin Shauf: There is no parallel here to Canadian Wheat Board operations.

Mr. Rick Borotsik: But it's not mandatory.

The Chairman: Mrs. Ur.

Mrs. Rose-Marie Ur: Thank you, Mr. Chairman.

First I would like to commend you on your briefing, your printed matter. It's easy to read, and I really appreciate the well put-together document.

In your statement you felt that the new regulations lack accountability to farmers. I believe you stated that. It's my understanding that 10 of the elected board members are farmers, and they'll be entitled to full disclosure of all information pertaining to the CWB's operations. Nothing will be off limits. Producer-elected directors will be on an audit committee, overseeing internal audits, and will be able to request whatever information concerning CWB's operations they wish. The directors will be the eyes and ears of the western Canadian grain producers on the CWB.

Do you not feel that is a wide window of opportunity...and accountability of the board to the western grain farmers?

Mr. Brian Saunderson: I think our point was there is no process for those elected farmers on the board of directors to report to the people who elected them. There's no minimum requirement to, for example, make an annual report to their stakeholders. It's that link to the grassroots that we don't see in the legislation.

Mrs. Rose-Marie Ur: On the term of one year, you weren't supportive of that—and I realize some of you weren't here when the minister was here the other day. He also had a suggestion: five members for two years and five members for four years. His sole option was not four for three, three for two and three for one. So I think there are various options to look at as to the term length.

I wanted to make one remark. Your inclusion clause in your amendment to Bill C-4 certainly is appreciated. I think it strikes a balance. If you have exclusion.... So many things in government—and I'm part of government—seem to be unbalanced, and I think this produces a balance for our farmers. By having those predominate it certainly exemplifies that not everyone will be coming for inclusion. That sets guidelines as to who will be able to participate and at what strength.

Thank you.

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The Chairman: Mr. Hill, five minutes.

Mr. Jay Hill: Thank you, Mr. Chairman.

I'd like to clear up a little bit of misunderstanding about this accountability, because the government claims this new board of directors will be highly accountable to the farmers who elect them. I refer to the bill, proposed section 3.09:

The president holds office during pleasure for the term that the Governor in Council may determine.

Proposed subsection 3.11(1):

The president is the chief executive officer of the Corporation...

In other words, they're one and the same person. And proposed subsection 3.11(2):

If the president is absent or unable to act or the office of president is vacant, the Minister may appoint an interim president.

Clearly, if you look at those proposed sections, it's the minister and cabinet, the government, that has the ultimate power over the president and CEO. I want to clear that up because of some earlier statements when other presenters were before the committee and Mr. Easter was referring to those sections, in case there was any misunderstanding.

I'd like to return to what Mr. Benoit was raising earlier. Has there ever been a vote of your membership to determine whether the majority of your members support continuation of the mandatory Canadian Wheat Board? Yes or no.

Ms. Patty Townsend: The pools, through their resolution process, almost every year at almost every annual meeting deal with single-desk selling and support for the wheat board. I am quite confident in saying that at almost every annual meeting they reinforce their support for single-desk selling.

Mr. Jay Hill: In other words, the delegates attending those meetings who are voting on behalf of your membership, and who are accountable to the membership, always support single-desk selling, and that's why your position is to continue the mandatory requirement?

Mr. Marvin Shauf: Single-desk selling has been supported by our delegates, and the mandatory requirement is something we see as fundamental to the success of the single-desk selling mechanism.

Mr. Jay Hill: It's my understanding that the Canadian Wheat Board originally was voluntary. Is that true? Was it a request by producers? Is it your understanding that producers requested that it become mandatory, or did the government take action during World War II to further the national interests in a time of war?

Mr. Marvin Shauf: My understanding is that it was the request of producers to have it mandatory.

Mr. Jay Hill: That's not my understanding, but I appreciate your answer and you're on record as stating that.

I was interested in your comments about how the election will take place, and that you oppose any weighting of the producer vote. This was a great concern of mine, even with the minister's plebiscite of last winter. A hobby farmer who produces 100 acres of barley and has a permit book can negate the vote of a farm family. In my case, we had one permit book for our company—I myself, my brother, and my father were all involved. We were farming 3,000 acres in the B.C. Peace River region. A hobby farmer would be able to negate our vote even though his or her livelihood would depend very little on what this bill and that board of directors decides.

Is that your official position in representing your members?

Mr. Marvin Shauf: Yes, it is. I think we live in a democratic country and that should be very important to a number of people around this table. It seems to me that if we're going to weight voting, a sensible parallel would be that somebody who makes $100,000 a year would have five votes for his MP, whereas someone who makes $20,000 a year would only have one. I think it would lead us to a very scary country when we begin to weight voting in that manner.

Mr. Jay Hill: I would suggest, with all due respect, that's a pretty ridiculous comparison.

Mr. Murray Calder: No, it's Reform policy. That's ridiculous too.

The Chairman: Order.

Mr. Marvin Shauf: I'd like to know why it's a ridiculous....

Mr. Jay Hill: Comparison?

Mr. Marvin Shauf: Yes.

Mr. Jay Hill: Because there are all sorts of reasons to have one person, one vote, when it comes to electing an MP. They're not electing someone to run a corporation that makes it a mandatory requirement that you belong and sell your product, which you raised yourself, and you only have one outlet through which to sell it. That's why I made that statement. To compare that to a vote for your member of Parliament, I don't think is accurate or fair.

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The Chairman: If you want to talk about this comparison, I know that in the past there was a property qualification for a vote, but it was done away with many years ago. For the upper house, you had to have property—

Mr. Leon E. Benoit: We're talking in a corporation here, a corporate structure.

The Chairman: —but the lower house would have no property qualification.

But we're getting off the topic here.

Mr. Jay Hill: Exactly. We're talking about a corporate structure. People would have a greater interest if they were a larger farmer, the same as if you had more shares in a corporation.

[Translation]

The Chairman: Mr. Coderre.

Mr. Denis Coderre (Bourassa, Lib.): I won't continue along the same totalitarian lines as my Reform colleague. I would like to talk to you about democracy.

In 83 per cent of Canadian companies, the CEOs are members of the board of directors. I would like to understand two things.

Firstly, since the Canadian government has a very important role to play in terms of providing some financial guarantees to the Canadian Wheat Board, why, in a partnership or collegial context, would it be inappropriate for the Canadian government to appoint the president or CEO?

Secondly, as I was saying, in 83 per cent of Canadian companies, the CEO sits on the board of directors. In your opinion, why should the CEO not be a member of the board of directors given that in any event, producers or farmers already control two-thirds of the board?

[English]

Mr. Marvin Shauf: I think it's mostly a question of accountability, of who the CEO is accountable to. One of the stated goals in this legislation is to improve the accountability to producers. I think it puts a CEO in a very difficult position to be directed by a board of directors but to be accountable to government. I think better accountability is provided when the CEO or president serves at the pleasure of the board and is responsible to the board of directors.

[Translation]

Mr. Denis Coderre: However, we have to establish a kind of balance. We're accountable to the taxpayers because we guarantee it, but on the other hand, two-thirds of the board are from the farmers and the producers. So we're talking collegiality and partnership. Don't you think we also have to be accountable to the taxpayers, and that's why the CEO, the president, should be appointed by the government?

Mr. Marvin Shauf: I think the one-third of the board that is appointed by the government gives the government considerable influence on the board of directors. I think that would be sufficient for what the government is taking responsibility for.

Ms. Patty Townsend: Proposed section 19 of the bill states that the corporation must submit a corporate plan annually that has to be approved by government, and it must have its borrowings approved by government. Even if the plan is approved by the government, it can't undertake individual borrowings without approval by the government. So we feel the responsibility of the taxpayer is there because it's written into the bill. So what we're trying to do is improve the accountability to the farmer, which we think could be improved.

The Chairman: Thank you, and thank you three people for coming here today. Your insights are very helpful and we'll be duly considering them.

Colleagues, I have a note of information. A Ukrainian delegation will be in Ottawa on Wednesday, November 19, and they've expressed an interest to meet with us. We can provide you with further information as time goes on.

Mr. Jay Hill: I have a point of order, Mr. Chairman. On the point raised earlier by my honourable colleague concerning the amount of time for questioning, I didn't want the impression left that the entire committee was in agreement, or has ever been in agreement, with the potential number of witnesses to be called, or the fact that they only have a 45-minutes presentation, including the total time we have to cross-examine them and bring relevant points forward. It's my understanding that those types of decisions have only been made at the steering committee or subcommittee of the committee, and have never been discussed in front of the whole committee. I want to raise that point. We've never had a full debate about how long we should allow for witnesses to come before the committee and present their points of view, or how many should be allowed and how much time we should allot to it. That has never been brought out at the full committee and I want that point made.

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Thank you.

The Chairman: Thank you.

As far as the witnesses are concerned, I'm at your disposal. If you want extended hours or extended time, you can certainly have it. But it's the decision of the committee to make it known to me so that I can make the proper arrangements. But until that time we'll go with the two or two and a half hours or whatever is normally allotted to committee meetings.

Mr. Jay Hill: Mr. Chairman, I want it known that was my position and remains my position. I'm more than willing to sit as long and as often as it takes to ensure that witnesses who want to appear on this very controversial and important piece of legislation can be heard, because some of the provisions in Bill C-4 weren't in its predecessor, Bill C-72. That's the position I have maintained from the beginning and I want that known.

Thank you.

The Chairman: Okay. I believe the clerk has distributed a schedule of meetings with the list of witnesses. You could look at those over the weekend, and if you have any suggestions, let me know next Tuesday.

We're adjourned till next Tuesday morning.