EVIDENCE

[Recorded by Electronic Apparatus]

Monday, March 17, 1997

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[English]

The Chairman (Mr. Lyle Vanclief (Prince Edward - Hastings, Lib.)): Could the members find their places at the table, please.

I don't know whether everybody can come to the table at the same time, but I would ask that at least the following people come to the table: Andy Baker, Kevin Proven, Brad Mroz, Fred Tait, Alan Kennedy, and Brad McDonald.

There are two or three more after that, but that's probably going to fill the table up for now. As of now, we have nine presentations. There were more people who had indicated that they wished to make individual presentations. We were able to hear three this morning. There may be others that appear. However, I think one of the important things that we are having the opportunity to do in this process is not only to hear your presentation but to have as much dialogue back and forth as we possibly can.

If everyone who indicated that they wished to make a presentation does show up, we will do our best to hear them. If they all do, we will be hard pressed to have much dialogue but we will definitely hear them. Some of them may have chosen to send their presentation to the committee or for some other reason haven't been able to make it today.

I would stress to the presenters that you keep it to five minutes. I will indicate when you have about half a minute left, so if you haven't made your point by that time, please do so in the last30 seconds that you have. I don't want to cut you off, but I might.

Welcome to the committee, everyone, and we'll proceed. We will start with Andy Baker.

Mr. Andy Baker (Individual Presentation): I'd like to thank you for giving me this opportunity to make my presentation. I'll keep it as short as possible.

I'd like to preface my comments on how I view the proposed legislative changes to the Canadian Wheat Board with a comment on how I think we arrived at this point.

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Farmers are a lot smarter than some of the non-agricultural press and a few so-called farm organizations give us credit for. If the Canadian Wheat Board was doing as poor a job of marketing our wheat and barley as these organizations claim, we would have gotten rid of it a long time ago. I'm not about to spend the money I do growing a crop to have someone else lose money for me selling it. In short, the majority of farmers know what works best for them.

That brings us to making changes to appease the small minority of farmers who are supported by organizations that don't have farmers' interests at heart. The problem with this is that changes that are short of getting rid of the Canadian Wheat Board will never be enough for this small group. So what we should be doing is making changes that enhance the Canadian Wheat Board's performance, not changes that fiddle with the three pillars that are the Canadian Wheat Board's keys to success.

The best gauge of the Canadian Wheat Board's performance comes from our competitors on the world market. The Americans say it's an unfair trade advantage, and we hear all kinds of talk from organizations about how it's going to be a subject at the World Trade Organization. They don't want us to get rid of the board because it doesn't work; they want us to get rid of it because it works.

The people who buy from the board give the board high marks in every aspect of customer service and marketing. They don't give the board high marks in pricing because they don't like paying high prices. What does that tell you?

As the government is trying to control the deficit, I would be deeply concerned with moves to weaken the board's performance. They are extracting a premium from the market, turning it over to farmers, who in turn add it to the economy of Canada and pay taxes to the government. All we would be doing by getting rid of the Canadian Wheat Board would be to further subsidize grain sales to other countries and add profit to multinational grain companies at the expense of our farmers and our country.

Now to the change I would like to see at the Canadian Wheat Board. The only complaint about the board the majority of farmers have had with it over the past 15 years that has not been dealt with has been the removal of politics from the appointments of commissioners to the board. We could do that very easily with absolutely no cost to farmers or the board, and we can do it within the present system of farmer representation to the board. The government of the day would simply have to get the Canadian Wheat Board advisory committee's approval of appointments of commissioners. We have then removed purely political appointments and given farmers a sense of control over the board. The operational changes to the board will happen as they always have, but they won't be wholesale changes fraught with mistakes that cannot be corrected.

Critics who say the board's present system of management has to change to more closely resemble present-day companies are forgetting that the world's two largest exporters of wheat have systems unlike their competitors. Cargill is one of them, and the Canadian Wheat Board is the other.

The change I have suggested has two major advantages associated with it: one, it allows the Canadian Wheat Board to continue to be the world's best marketer of wheat and barley and continue to pass the highest return back to farmers; and two, it can be done without extra cost or involvement to farmers. And that's important to me when I spend so much of my time trying to produce a crop and then so much more of my time trying to sell onto the open market the balance that isn't controlled by the Wheat Board.

If I could, in closing I'd like to say something about the previous presenters. Mrs. Cowling asked about the membership of the organizations that were up here. It was interesting to hearMr. Archibald from the Western Canadian Wheat Growers Association peg his membership at 6,000, because six or seven months ago, when I was on a CBC program with Mr. Archibald, he pegged his membership at 7,000. I asked him to send an audited statement to the interviewer to get it checked, and I know he hasn't because I talked to her. If their membership is dropping at that rate, in three and half years they won't have any members. So you can base what they're telling you on the popularity of their membership.

If you want, I'd prefer if you asked all the farm organizations to present audited memberships to you when they make presentations.

Thank you.

The Chairman: Thank you very much, Andy.

We will continue to Keith Proven.

Mr. Keith Proven (Individual Presentation): Thank you, Mr. Chairperson.

I'm personally glad you've taken the opportunity to listen to individual farmers. There was some concern that we weren't going to have the opportunity as individuals, that only farm organizations were going to present. I think it's a wise idea on your behalf to be able to listen to individuals.

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As a producer, I do not accept the need for any of these amendments as proposed. Price pooling, equality of delivery, credit control, and the ability of the government to support the initial prices and also to provide credit for foreign buyers are things that I as an individual producer need and desire.

As an individual producer, I hire the Canadian Wheat Board to market my grain. I do this because collective action in the marketplace is marketing, not selling. The arguments that are presented by farm groups who are opposed to the Canadian Wheat Board - and I say opposed and want to destroy it - are specious at best, and only indicate that their philosophical background is opposed to collective, cooperative action.

I class it as a good business choice to have the Canadian Wheat Board hired by me to market my grain, as opposed to having an ideological or philosophical axe to grind, which I think these other farm organizations have involved themselves in. They stress business but they talk ideology.

One of my concerns is that the government has reacted to the pressures from...I won't say the lunatic fringe, I will say fringe groups. As Andy stated, it's a real concern as to how this kind of thing can be spin-doctored to look like the Canadian Wheat Board has not done a good job over the last60 years. If the Wheat Board had not done a good job, then farmers would have turfed it a long time ago. I think that in questioning any of these groups, you have to always preface your remarks by saying what is the problem, why do the majority of farmers support the Wheat Board, and who do you represent?

Again, with regard to my concern about appeasement, I've been around politics long enough to know that sometimes governments will try to appease groups by throwing in a morsel or a small bone, thinking that this will do the trick. The Canadian Wheat Board is too important to me as an individual to allow amendments such as these to be put into place and even to be discussed. I don't understand why the present government would even involve itself in this. It does not gain anything politically by doing that, other than that you deflect, and maybe hope to deflect, some of the antagonism that's being thrown at government and at the Wheat Board by these fringe groups.

In the background papers it was stated that according to some of the trade agreements we have involved ourselves in in the last few years, the Wheat Board might be threatened, that we should change the Wheat Board to protect it within the North American Free Trade Agreement, GATT and other trade agreements we signed. I reject that as a pre-argument. We've never had a ruling that says the Canadian Wheat Board goes against any of the trade agreements, so why would we weaken it now?

Certainly when I see that the Americans are opposed to the Wheat Board, I say that's good. That means the Wheat Board is doing a good job. If you look at Helms-Burton, I don't think the Americans can be trusted.

In summing up, I would say add canola, rye, flax and barley to the jurisdiction of the Canadian Wheat Board. That will make me very happy. And try to ignore the lunatic fringe, even though they are loud and raucous.

Thank you.

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The Chairman: Thank you very much, Keith.

Next is Brad Mroz.

Mr. Brad Mroz (Individual Presentation): Thank you, Mr. Chairman. Thanks again for coming out to Winnipeg to listen to us, the individual farmers.

I'm 34 years old. My wife Tracy and I have three children. We farm 4,500 acres of grain and oilseeds with my parents, my brothers and their families. The farm is located at Beausejour, Manitoba.

All of our wheat and approximately 80% of our barley are marketed through the Canadian Wheat Board. I support the Canadian Wheat Board as my single-desk seller for pure economic reasons. I believe the Canadian Wheat Board system of price pooling, single-desk selling, Canadian government guaranteed borrowing, along with our Canadian system of quality control gives me the highest returns for my grain.

Many of the changes to the Canadian Wheat Board Act proposed in Bill C-72 will result in a weaker and less effective Canadian Wheat Board. Proposed section 39.1 of Bill C-72 would allow the Canadian Wheat Board to make cash purchases of wheat and barley. Cash buying, whether it be from farmers or the grain trade, would endanger price pooling. I endorse price pooling because it provides me with an inexpensive risk management tool and orderly grain deliveries to our grain panelling system. The cash buying proposal in proposed section 39.1 should be withdrawn.

Rather than using cash buying as a way to ensure grain is in position to fulfil sales agreements, I would prefer to see the Canadian Wheat Board enforce its delivery contracts with farmers by increasing liquidated damages to those farmers who do not deliver the amount of grain agreed to on their delivery contracts. I expect to be obligated to fulfil a delivery contract with the Canadian Wheat Board in the same manner in which I would fulfil a delivery contract with any grain company for other grains or oilseeds, such as canola or flax.

Proposed subsection 45(2) of Bill C-72 allows for the removal of any type, class or grade of wheat and barley from the Canadian Wheat Board jurisdiction. In order to maximize returns on my farm, I would ask that section 45 be amended to allow farmers to add grains such as canola, flax, rye or oats to the Canadian Wheat Board jurisdiction. This would allow the Canadian Wheat Board to be strengthened, not weakened.

Clause 7 of Bill C-72 revokes the federal government guarantee of Canadian Wheat Board initial price adjustments. The setting up of a contingency fund to replace this federal government guarantee only adds to farmers' costs and puts farmers at greater risk during global trade wars similar to those that devastated western Canadian agriculture in 1985 until the early 1990s. The United States government and the European Union still use and will continue to use taxpayer-funded export subsidies.

The government guarantee of Canadian Wheat Board prices, borrowings, operations and credit sales is vital to the Canadian Wheat Board. Its partnership with the federal government saves the Canadian Wheat Board and farmers over $60 million annually. This saving more than covers the total cost of operating the Canadian Wheat Board each year. Each year the Canadian Wheat Board borrows about $6 billion, which it uses to pay farmers for their wheat while it waits for payment from customers.

To put this into perspective, consider that the entire Canadian money market is worth about$30 billion to $35 billion. The Canadian Wheat Board's $2 billion worth of borrowings in the New York money markets make it the second biggest Canadian borrower, behind only the federal government. With the Canadian Wheat Board farmers are major players in the financial markets. We watch everyone, and everyone else is watching us.

The initial payment adjustments have not incurred a deficit in the Canadian Wheat Board's 61-year history. Based on this performance, there's very little risk to the Government of Canada. Therefore, Bill C-72 should not amend subsection 7(3) of the Canadian Wheat Board Act. As well, the clause of Bill C-72 that allows for the creation of a contingency fund should be deleted.

On the issue of governance, Bill C-72 allows for a partially elected board of directors. I do not think the Canadian Wheat Board lacks accountability. As a producer, I have access to the Canadian Wheat Board commissioners, the advisory committee, the Canadian Wheat Board area representatives, as well as any other department of the Canadian Wheat Board. I receive the annual reports and bimonthly newsletters.

Without the Canadian Wheat Board my grain would be sold by private grain companies. I know for a fact that a private grain company would never give me access to the same information I receive from the Canadian Wheat Board. The private grain trade is accountable only to itself, not to farmers.

On the issue of governance, I would recommend that the five commissioners of the Canadian Wheat Board and the Canadian Wheat Board advisory committee be retained because a partially elected board of directors would not change the accountability of the Canadian Wheat Board. By attempting to do so, it would only endanger the government guarantee of Canadian Wheat Board prices, borrowings and credit sales.

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To increase the accountability of the farmers, the farmer-elected Canadian Wheat Board advisory committee must approve all appointments of commissioners to the Canadian Wheat Board. Therefore, the commissioners would be appointed by both farmers and the Canadian government.

In regard to proposed subsection 32(3) in Bill C-72, I support this amendment to permit the Canadian Wheat Board to pay carrying costs and to make other delivery-related payments to farmers.

Proposed paragraph 32(1)(d), permitting the Canadian Wheat Board to issue negotiable producer certificates, would be acceptable as long as it did not reduce the value of the final payment to farmers who chose to receive their final payments in the way in which they are currently administered.

In closing, I cannot accept amendments to the Canadian Wheat Board Act that have the potential to weaken a single-desk selling price, pooling or the farmer-government partnership. The Canadian Wheat Board is a respected world-class organization. I do not want to see any changes that could result in it becoming just another grain company.

Thank you very much.

The Chairman: Thank you, Brad.

We'll go to Brad McDonald.

Mr. Brad McDonald (Individual Presentation): Members of the Standing Committee on Agriculture and Agri-Food, I'm addressing my remarks to those members of your committee who are actually interested in maintaining our orderly marketing system for wheat and barley through the Canadian Wheat Board and who are interested in maintaining some Canadian sovereignty in the Canadian grain marketing system.

As one of several thousand farmers who rallied last summer in support of the CWB, as one of the thousands who disagreed with the Western Grain Marketing Panel report, and as a former member of the CWB advisory committee, I have to tell you I cannot support Bill C-72. The few positive aspects of it far outweigh the significant negative aspects.

Problems arising from the imposition of the domestic feed-grain policy in the 1970s created a form of dual marketing that on several occasions created a situation where the CWB had difficulty in acquiring sufficient feed barley to fill the sales commitments. This has led some people to request that the CWB be given the right to buy grain on a cash basis.

The CWB does not need that power. It should only be allowed by Order in Council to replace from the grain trade those amounts needed to replace the farmer production contracts that are in default. The full cost of default should be charged back to the farmer responsible. In those cases where the default cannot be collected, the Department of Agriculture and Agri-Food should reimburse the CWB.

If the CWB begins buying grain on a cash basis, there will be no going back. It will move from being a first-class marketing agency to being just another grain company.

The proposed change in governance was promoted as giving more control or ownership to farmers. Instead, the minister is given more control of the board, directors and president hold office at the pleasure of the Governor in Council rather than on good behaviour, and the chair and the president are appointed by the minister. One can only wonder what would happen if a minister like Doug Young was in charge.

Farmers are expected to pick up another cost by insuring the adjustment payments of the pool through the proposed contingency fund. How popular does the government think this would be with farmers, who have already been saddled with a whole bunch of new costs by this government while having no control over any number of factors that can delay shipment of grain or cause lost revenue?

Proposed section 45 of the bill allows for an exclusion of kinds, type, class or grade of wheat, or dual marketing by the back door. A minority of farmers on the board, in combination with non-farmers, could rule an exemption to be not significant, and no vote on the exemption by farmers would take place. Because these exemptions are allowed, I would expect the lobbying from plant breeders, processors and grain companies for exemptions to be continuous and powerful. Ironically, nowhere in the bill is there a provision to add commodities to be marketed by the board.

The clause to allow producer-tradable certificates is a stupid idea. It would only pass the benefits of early marketing from farmers under financial duress to farm supply sectors and the financial institutions.

The Canadian Wheat Board has demonstrated its superior benefits to farmers in the Canadian economy. I don't know if Bill C-72 is a poor attempt at political compromise or a clever trick to weaken orderly marketing through the single desk. I do know it doesn't give the leadership or support that will be required in the next millennium.

Thank you.

The Chairman: Thank you, Brad.

Alan Kennedy.

Mr. Alan Kennedy (Individual Presentation): Thank you, Mr. Chairman, and welcome to Manitoba. Thank you for this opportunity to speak to the committee.

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I'm a primary producer in the Red River Valley. I have no credentials other than 40-odd years of producing and marketing crops in the Red River Valley.

It may be slightly off the mark, but I do have some experience in going from marketing a commodity, a crop, through a single-desk selling arrangement and going to an open-market arrangement.

I do produce grain; for 33 years I have produced grain corn. One of our premier markets for grain corn in Manitoba used to be the distillery at Gimli. As corn growers, we had what was in effect a single-desk selling arrangement. As long as we could come up to their standards... And for distillery corn, the Manitoba distillery has very high standards compared to feed corn, much similar to malting barley compared to feed barley.

Seagram's, the distiller at Gimli, embarked on a cooperative venture with our growers association. They said they wanted to buy a Canadian product, and they would buy directly from us as growers. Our growers association, on our behalf, negotiated a pricing arrangement with the distillery, based on the Chicago Board of Trade near-month futures price at the middle of each month. That governed the price for the following month.

I tracked my returns over the decade of the 1970s when we were selling under that arrangement, and there was over the long haul about a 15¢-a-bushel premium for distillery-quality corn. Sometimes there was nothing and sometimes there was 50%, depending on the relationship to the Chicago Board of Trade market and the feed market. However, over the long haul, there was a premium there.

I always remember a gentleman by the name of Paul Klein, who in the 1970s was the grain purchasing dealer for Seagram's. He spoke to us at our corn growers annual meeting one year, and he cautioned us. At that time, we were about 75 producers in the Carman-Morden area who were producing grain corn. As I say, under that situation we had a one-to-one arrangement with the distillery under direct-selling, a single-desk price arrangement.

Paul Klein warned us. He said if you ever overrun the Gimli market and produce more than what we can select from what we can consume, be prepared to take control of your markets, because if you don't, somebody else will, and they won't do it for nothing. Those were the most sage words I've ever heard anybody speak on marketing.

The minute somebody else gets in between, he's not going to do it for nothing. This, to my mind, is the biggest argument for single-desk selling, because when we lost that privilege - I call it a privilege - of dealing directly with our buyers....

In 1981 we had an explosion of corn acreage in Manitoba due to some favourable crops and poor wheat prices, and what not. Gimli, the distillery, opted to go to buying through tenders through brokers instead of buying directly from growers. Their reason was quite logical; they found themselves all of a sudden dealing with 800 growers instead of 70. They had problems with delivery scheduling and everything else. They said let the brokers sort this out for us. But, again, the brokers aren't going to do it for nothing. What happened was it took just two years for our premium to disappear, and there was only one price for corn in Manitoba. There still is: feed price.

So that's my experience of what happens when you go from a single-desk selling arrangement with a commodity to the open market. As Mr. Klein said, there is a cost; your middle people are not going to do it for nothing.

Another point I am concerned about is the varietal segregation and identity preservation, particularly in our milling wheat.

Again, going back to my experience as a corn producer, we have an annual seminar and we had a resource person up here just a month ago from Pierre, South Dakota. He's on the cutting edge. He runs a 3,000-acre commercial experimental farm. He was giving us all the work he had done towards low-cost production. He said it's the same old thing: you're in a global market, and you have to be cost-driven. He's into all sorts of innovative things. He's even growing cotton in South Dakota, if you can believe it.

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He came up with one on us. He was telling us about all the changes we have to be ready for. He said that the next thing coming is IP. He said we're just getting into it. He said they're producing specific crops directly for the processors.

We all looked at him. The reaction from Manitoba growers was much the same as that of the North Dakota growers. We say they have a transportation subsidy because the army engineers maintain the Mississippi bargeway. They say they have always had that; it's not a subsidy.

But that's my point. Particularly here, I'm using the Glenlea extra-strong program here in Manitoba. That's our only hope in Manitoba: to grow a specific crop for a niche market of some kind and have it identity-preserved and handled in an orderly way through the border.

The Chairman: Quickly, please, your time is up. If you have a comment, one or two sentences to sum it up -

Mr. Kennedy: Just on pooling, I would make the argument that, again going back to cost, we've had surveys by numerous learned gentlemen who have established that there is a cost with going away from pooling and going to an open market when you go on the commodities exchange: you have to manage risk.

Why would you destroy that? I guess the argument would be in risk management, why do you have group insurance plans for managing risk?

Thank you.

The Chairman: Thank you very much, Mr. Kennedy.

We'll have Fred Tait make his comments. Then I think we'll go to 15 or 20 minutes of questions and comments in total from the members, and then we'll have the rest of the individuals come forward. Go ahead, Mr. Tait.

Mr. Fred Tait (Individual Presentation): As one of those people who has put some effort into having a Commons agriculture committee come out here to western Canada, I'm very pleased that it has happened.

There is one suggestion I would make perhaps in this regard. If you want to come out to western Canada to meet with farmers, perhaps give some consideration to where farmers live. This is a luxurious place, but it's not where we live. I know it's not very convenient for some of the people who have driven probably 150 miles. It's not central or anything else. That's just a suggestion.

I look at this larger issue. I've probably read more and heard more information and disinformation on this issue of grain marketing than probably any other issue in farm politics within the last five or six years.

I get a sense of a direction, or a drift. I compare the drift I'm getting to when I was a young lad working with my grandparents or their peers from that age group. They would pause at some time during the day and make observations like it's going to rain tomorrow, or it's going to be awfully windy, or we're going to get our first frost maybe about Friday evening. I remembered that because, first of all, of the ability they had - it's a necessary ability - to use their senses to get some grip on what was coming down the road toward them in the weather. As farmers, that determines your whole success.

As far as the weather goes, I've lost all my senses, because I rely on another medium now. But my sense tells me, in regard to this Wheat Board and grain marketing issue, that the Wheat Board is facing a very heavy storm. I don't think we're even anywhere close to the centre of it yet.

The debate over grain marketing has been one of emotion, ideology, and on very rare occasions, economic benefit. We've had three economic studies. Two were very supportive of the board. There was one negative study by Colin Carter. It was interesting, however, to note that at a trial or court hearing last year in Alberta, Colin Carter, under oath, testified that much of the information contained in his analysis could not be supported. In fact, it was theory.

We've also endured our fair share of conspiracy theories that involved Credit Union Central and the Saskatchewan Dairy Cooperative. The last one to make the round was that we had actually spied on the U.S. embassy to gain an advantage on a grain sale.

The follow-up of this conspiracy theory though - it was similar to others - showed that there was no fact: it was all imagination. I think perhaps there's a future for some people to write James Bond types of stories.

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I have a sense that this trend is part of a general trend toward privatization and deregulation that continues. I somewhat suspect that perhaps within the bowels of bureaucracy in Ottawa, a decision has already been made to dismantle the Canadian Wheat Board. At least there's that wish within some quarters.

When I look at individual clauses within that Bill C-72, clause 22, it allows the board of directors to recommend to the minister to ``exclude any kind, type, class or grade of wheat...produced in any area in Canada''. The ``area'' part concerns me. Does it mean that a portion of a province within western Canada could be removed from the jurisdiction of the Canadian Wheat Board?

I asked Minister Goodale that question. He said that if it does mean this, I'll see that the legislation is amended to prohibit it. This is something that maybe you as parliamentarians should look at.

If that situation were to occur, grain could freely flow into an area excluded from the control of the Wheat Board, and thus to the export market. You have established a dual market by that simple change of excluding a small area of western Canada from the control of the Wheat Board.

Also, clause 22 describes a process whereby the minister may call for a plebiscite to remove grain from the board. It refers to what is ``significant'', yet there's nothing in this act that determines what's significant and what's insignificant. There's no matching section, as many other presenters have pointed out today - you're going to hear it again in Saskatchewan and Alberta - that allows a producer to add grains marketed to the board.

I asked the Minister of Agriculture, Ralph Goodale, in December, in Saskatoon, if it was an oversight that this legislation only allows producers the democratic choice of weakening the Wheat Board. Interestingly enough, Ralph Goodale ignored the question and didn't answer. Perhaps you as parliamentarians can get him to answer that question.

I also have to have some concern about these proposed amendments. Are they moving toward compliance with what you see as NAFTA and CUSTA requirements and also onto a position that has already been developed for the upcoming round of GATT?

In the areas of governance, elected directors are to give farmers more control, we're told. One would wonder why electing directors to the Wheat Board would make the board any more accountable than the present advisory committee that we have had.

There has been concern that the government will appoint six or seven directors and the chief executive officer. But I see here something I think that is much more sinister. I see a great deal of pressure coming from within the farm community that we need more representation, we need to elect them all. The government will say yes, it will do that, but in the process, it will withdraw all financial commitments to the board. That would only be reasonable.

I have to look at what's being proposed here. My former member of Parliament, the former minister responsible for the Canadian Wheat Board, was Charlie Mayer. I asked myself what Charlie Mayer would have done with the Canadian Wheat Board if he had been empowered by this proposed legislation. It says the directors will serve at the pleasure of the minister. The directors who didn't serve the pleasure of Charlie Mayer would have been removed and then replaced with people who did serve the pleasure of Charlie Mayer in isolation of what we as producers on the ground wanted.

I see this as an enormous threat to future democracy. It's an instrument designed, in the wrong hands, to completely destroy the Canadian Wheat Board.

Thank you.

The Chairman: Thank you very much, Mr. Tait. I'm going to go to Jake and Wayne to start with.

Mr. Jake E. Hoeppner (Lisgar - Marquette, Ref.): Thank you, Mr. Chairman. I will be very brief.

The Chairman: If you take all the seven minutes, there won't be any comments from the other folks.

Mr. Jake E. Hoeppner: I'm going to put the question to each one of the presenters. We've heard today that grain companies are eligible, or can, under the Wheat Board Act pay a huge selection premium to divert grain from opposition companies to themselves.

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Do you agree with this policy? And have you ever been able to take advantage of this type of selection bonus during your farming career?

A voice: This is Bill C-72, Jake.

The Chairman: Jake, try to make your questions pertain to Bill C-72. We've discussed this at quite some length today, and I'm not going to stop you from doing it, but as we said at committee before, we want to try as much as possible to keep our discussions related to amendments of Bill C-72.

Mr. Jake E. Hoeppner: My concern, Mr. Chairman, is that we don't really know what the Wheat Board Act is, and if we are going to change it, we better make sure that we know what direction to change it in. I think when we talk about the pooling system and single desk, this has to be answered.

The Chairman: Keith, very briefly, please.

Mr. Proven: As a producer, I've always known that if I grow malting barley there is a premium attached to it. When I look at what's happening with grain companies offering premiums for direct delivery, for truck delivery, I see that as a problem within the regulations. We've deregulated to the point now where we cannot have any control in price pooling. If we continue, you'll simply see trucks running up and down the roads criss-cross, backwards and forwards. We will have no organization left.

We have a bulk commodity and we must have an efficient way of gathering it and delivering it to port. If we continue to deregulate, we have no efficiencies. And I am not in favour of those kinds of deregulation that take away the efficiencies we've worked hard to develop.

The Chairman: Brad.

Mr. McDonald: I'm aware of the various so-called incentives or whatever. Sometimes they're disguised as trucking premiums that the companies use to move grain to a particular point. It seems that this is actually a question for the grain commission.

The tariffs are high enough. For example, if you're paying $11 on barley or $9 on wheat, but your operating tariff at the point and your costs are only about $5, with the rest of it going to overhead, the company then has that much to play with. They can take what they get for overhead for a number of points and concentrate it in one place, saying they want to direct grain there. The question should really be directed to the Grain Commission -

Mr. Jake E. Hoeppner: They wouldn't answer.

Mr. McDonald: Yes, well, they're really the ones who are in charge of tariffs. Why are the tariffs allowed to be as high as they are?

The Chairman: Brad Mroz.

Mr. Mroz: We've received premiums for our grain grown on our farm. It's high protein wheat and is sold through the Canadian Wheat Board. We have a grain dryer at our farm, we straight-cut, we keep the quality up, and we get top grades and top protein. That's our premium. It's the same thing for malting barley through the Canadian Wheat Board.

But I have never received any more for open market grains in a premium. There's never a premium on the open market. It's the price for that day. If you wish to sell, ``that's the price today''. The premiums we do get result from Canadian Wheat Board marketing.

The Chairman: Andy.

Mr. Baker: I would just prefer to deal with this legislation and my ideas on the legislation first, and then we'll allow ourselves to make changes to the regulations once we get past this major hurdle.

The Chairman: Okay. Fred.

Mr. Tait: I dealt with this in a question from the member at a previous session.

The Chairman: Alan.

Mr. Kennedy: The only comment I could make, Jake...again, I have had some experience in the marketing business. I think the commodities trading market in agricultural commodities is a savage jungle.

Voices: Oh, oh!

Mr. Kennedy: It is. It's war without benefit of the Geneva Convention.

Voices: Oh, oh!

Mr. Kennedy: Anything goes.

Mr. Jake E. Hoeppner: That's what we're trying to avoid, though, Alan.

Mr. Kennedy: I don't think you can avoid it. You can find ways to contend with it, but you can't avoid it.

Mr. Jake E. Hoeppner: Yes, but I wanted your opinion on it. I appreciate that comment -

The Chairman: I think he just gave it to you, Jake.

Do you have another comment, Jake?

Mr. Jake E. Hoeppner: No, thanks.

The Chairman: Thank you, Jake. Wayne?

Mr. Wayne Easter (Malpeque, Lib.): I think that's a good comment, Alan: ``war without the benefit of the Geneva Convention''.

Mr. Chairman, I just want to put a point on the record that relates directly to this issue. It's very short. It's a point made by Robert Carlson of the National Farmers Union in the U.S. He said:

From a competing farmer's perspective, we in the U.S. do not have a vehicle like the Canadian Wheat Board to create producer marketing power in the international grain trade. We basically sell for the best price among our local elevator companies and lose our interest in our grain after that point.

.1700

Then he goes on and talks about the U.S. system. He further makes the point that sometimes we fight among each other as farmers in the name of free trade, and concludes with this quote:

If we destroy the various institutions that farmers in many countries have built to help themselves survive economically, we will have nothing left but producers standing bare among the ruins of structures that once empowered and protected them in a marketplace dominated by giants.

I certainly see the Canadian Wheat Board as one of those institutions that protects farmers.

I know a number - in fact most - of the witnesses here have made the point that they have concerns with Bill C-72 and basically prefer the current system. Regardless of that fact, we do have a bill before us.

I want to know your views in terms of the exclusion section. Based on the recommendation of the board, I believe we can exclude.... This is clause 22, where former section 45 of the act is renumbered to 45(1), and states that we may be ordered to exclude ``any kind, type, class or grade'' - that section, which is basically exclusion. Do you believe that we need an inclusion clause saying virtually the same thing?

The Chairman: Do you want a comment from everybody on that, Wayne?

Mr. Wayne Easter: Yes.

The Chairman: Okay, we'll start with Alan, just a brief comment. Some have already commented on this, but just to....

Mr. Kennedy: Yes, I would be in favour of an inclusion provision in the clause.

Mr. Tait: I already commented on it - yes.

Mr. Baker: If we're going to have the exclusion clause, yes, we should have an inclusion clause. I personally don't believe we need either. That's up to the producers to decide - whether they want to include crops under it or exclude them. I don't think that's up to some elected, half-elected, half-appointed, half-whatever board to do it for us.

The Chairman: Just a point of clarification: the way it's written is that it still would have to be a producer vote. At the present time it's only exclusion, but it would still have to be done by a producer vote. The board can't make the recommendation on its own, even the way it's written now, if I understand it correctly.

Mr. Baker: Okay, then I would agree with the inclusion clause along with that.

The Chairman: Okay. I think I'm clear on that. If I'm wrong, somebody can correct me, but I think I'm clear.

Brad.

Mr. Mroz: Personally I don't feel there should be an exclusion clause, but seeing as it's in there, I would prefer to see an inclusion clause, yes.

The Chairman: Okay.

Brad McDonald.

Mr. MacDonald: It's really simple. You take out the exclusion clause and put in the inclusion clause.

The Chairman: Thank you.

Keith, I believe you spoke clearly on this before, but you might want to repeat it.

Mr. Proven: To the Liberal MPs I know very well, I would say I expect they could remove the exclusion clause. They have such power within the committee that....

Some hon. members: Oh, oh!

The Chairman: But if they weren't as powerful as they have led you to believe they are, would you like an inclusion clause, if there is an exclusion clause?

I don't know which one you're referring to. I won't put you on the spot by naming them here, Keith.

Mr. Proven: I hate that kind of question because what you're de facto doing is agreeing with the legislation. You're saying, well, if we've got the exclusion, let's have the inclusion. My statement was get rid of all the amendments. I don't see anything positive.

The Chairman: Okay. Wayne?

Mr. Easter: The other question I had, Mr. Chairman, relates to the minister. I think we've stated that single-desk selling is one of three pillars and must remain. Do you see any specific areas in the legislation - I think somebody has mentioned cash selling - that would in fact weaken that single-desk selling aspect - that pooling of returns?

The Chairman: Keith, we'll start on your side and go across. I think you've already answered it, but I don't want to put words in your mouth.

.1705

Mr. Proven: No, I've already answered it. When we were allowed five minutes to speak on this, I thought, well, what do you do? You can peel through section, after section, but basically it's a waste of time, because you don't have the time to do it.

What do you come down to when you're feeding the cows and raising the grain? What do you think about? You think about what's the best way of handling the problem. If the problem is the amendments, if the problem is the premise that got us to this place of having to have these amendments, what do you do? You get rid of the problem, which is the amendments. That's the best way to handle it. There's nothing positive here.

The Chairman: Brad.

Mr. McDonald: As I understand it, it may have come from other quarters, but particularly it was the board that came forward with this idea of wanting the cash, being able to buy on the cash market, particularly with what happened a couple of years ago, when they weren't able to meet their sales commitments on feed barley to the Japanese, because farmers with their production contracts went into default. I had something to do with the original development of those contracts back in 1994-95 and knew at that time that this was just a fix-up for the problems that were caused by the domestic feed grain policy.

The problem basically was that there wasn't a proper cost attached to these contracts when they went into default. If I default on a canola contract, I can tell you my grain company, MPE, will come and hit me for every last nickel it cost them. That's what the board needs in place. They have to quit playing politics and trying to be nice guys. We're either selling grain or blowing smoke.

As far as I'm concerned, they don't need this at all. If the farmers don't feel the price the international market is offering is high enough and don't want to offer grain to the board, the board has to live with that.

The Chairman: Brad.

Mr. Mroz: I feel the cash buying clause is a threat to single desk and I also feel the exclusion clauses that remove classes or grades of wheat or barley from the Wheat Board jurisdiction are also a threat to single desk.

The Chairman: Andy.

Mr. Baker: I get kind of wary, as Keith said. I put my presentation forward on what I thought was the right thing to do and now I'm being asked questions on what appears to be legislation that's already here.

The Chairman: No, there's no legislation already here, Andy, please. We wouldn't be here if it were already here.

Mr. Baker: It almost seems that we want to fiddle with some kind of legislation or that this is going to be legislation and now we're being asked what would be more acceptable.

The Chairman: No.

Mr. Baker: What is acceptable to me is that we go ahead and change the advisory committee's role to one of approving commissioners appointed to the board, and then we allow these changes to take place in a rational way, not just rush in to make a bunch of major, fundamental changes to the Wheat Board.

The Chairman: Just so we're all clear on the process, this is proposed legislation, as all legislation is at first reading, whether it's provincial or federal. It came to the Standing Committee on Agriculture after first reading, which gives the committee more flexibility on making amendments to it. In order to try to find out what amendments we could make and in order to make as many people as possible happy with the legislation, we are in western Canada this week listening to people.

Mr. Baker: Okay. I guess what I actually should be saying then is that my proposal is that the advisory committee has that role in appointing commissioners, and then I should not say anything else after that, basically.

The Chairman: All right.

Fred, do you wish to say anything?

Mr. Tait: My overall perception of the whole bill, Wayne, is it's not a bill that's designed to strengthen the Wheat Board. I don't see that.

We get back to the point Keith made, and several other people have made this to me. If we start talking about changes or adjustments, then we become part of the process and we get lured into that process. It's happened to us as farm organizations on many occasions in the past and I believe it will happen in the future. But we have no alternative but to participate, I guess.

You talked about the board of governors. I detailed earlier how I think that is going to be used in the future as a trade-off to end government financial support. The cash buying has been well addressed.

.1710

What I suspect this process we're going through here today is all about - and I suspect it will come out with some changes in wording - is to make the product more presentable to the public, to kind of suppress the process, particularly just before an election.

The Chairman: Alan.

Mr. Kennedy: I would echo what previous people have said. I would have a problem with anything that weakened the pillars - and you've heard this over and over today, no doubt. But the basic thing I would look at is costs. We're always hammered with costs. You can tell us we have to get our costs down. Well, can the costs of risk management - and there will be costs of risk management if you try working this in with the pools - be properly identified and attached to these cash contracts, and is the cost worth it to accommodate the few people who think they have the smarts to do better by outguessing the market? That would be my question. What's your cost-benefit ratio? Is it worth it?

The Chairman: Thank you.

Elwin.

Mr. Elwin Hermanson (Kindersley - Lloydminster, Ref.): Thank you, Mr. Chairman, and thank you, each one, for appearing before our committee.

Keith, you made the comment that you hired the Canadian Wheat Board to market your grain. Actually that's my position. I wish I could hire the Canadian Wheat Board to market my grain, but in fact instead of hiring them it's more like I inherited them; I had no choice. It's like my parents or my brother and sister, really; I'm stuck with them, and hopefully I can like them and work with them.

The Chairman: They're stuck with you too, Elwin.

Mr. Elwin Hermanson: They're stuck with me as well. So I wish we could hire the Canadian Wheat Board.

As a comment first of all, several of you more or less stated that you'd like to see the Canadian Wheat Board stay just about exactly the way it is now, even with commissioners and the advisory board.

I don't know if you're aware of it, but there was an internal study done, a management study of the board by Deloitte & Touche, the auditors of the board. Employees of the Canadian Wheat Board gave evidence to that audit on the basis that it would never see the light of day, and it was just recently leaked to the public.

In that management audit, it was very clear that the governance of the board was antiquated. Really, what Deloitte & Touche said was it's a governance system suited for the 1940s or the 1950s, not for the 1990s. It indicated there was poor communication between the commissioners and other management and employees of the board. It indicated that there were billions of dollars that were not budgeted, which is basically an ``Okay, well, I guess we'll pay this bill today'' - that type of situation. This study said there had to be big changes, governance being one of the first and foremost. So that really means that even the board itself and the employees thought the status quo wasn't good enough.

Several of the changes in this bill have been suggested by the board itself, by commissioners, by senior employees. So I don't think the status quo is good enough, and I think we had better start looking for ways to make it better.

Now I question each of you: There is a tremendous amount of division in the farm community over the Canadian Wheat Board, whether or not it be a single-desk seller or a dual market, or whether it sells on a cash basis or solely on pooling, and so on and so forth. I have heard very little evidence today, and none from any of you gentlemen, that would end the division and some of the confrontation out in the farm community. You guys have talked about rallies you have gone to. We have Farmers for Justice illegally taking grain across the border. There is nothing in Bill C-72 and there's nothing in anything you guys have presented to our committee that's going to end that rancour and division.

Whether you like it or not, two-thirds of barley producers in Alberta voted for dual marketing. That's a lot of people. There were several thousand, far more than voted for the advisory board. That's a fact of life.

I'd like to hear some suggestions from you gentlemen that would bring solutions and bring peace to the farm community, rather than insist that we be intransigent, that we keep everything exactly the way it is, and that we just continue to fight with our neighbours. That's not good enough.

The Chairman: Maybe we'll start in the middle. Brad Mroz.

Mr. Mroz: Obviously, Mr. Hermanson, you've been reading the papers too much, because that's the problem here. The media is picking up on this fringe because they want a story. They don't investigative report anything more; they just put a headline out there. They don't have the economic facts behind some of these decisions.

Some people went to jail, they say, for hauling grain across the border, which isn't true. They went to jail because they didn't fill out the paperwork needed to cross the border. Anybody can cross that border with the proper paperwork. They went to jail because they didn't have their paperwork, their tractors were impounded, and they stole their tractors back. They went to jail not for selling grain, but for not doing their job.

.1715

Mr. Elwin Hermanson: I'm talking about the majority who aren't breaking the law but aren't happy. It's them I want you to address.

The Chairman: Elwin, let them answer.

Mr. Mroz: The answer is that you should ignore them, because they're a fringe group.

Last summer Mr. Goodale asked for a response to his letter, and over 12,000 farmers replied. It says in the summary from the government that 90% of those letters were in favour of the three pillars of the Canadian Wheat Board. So let's face it, the argument is coming from a small minority, not the majority. We are the people who grow the grain, and we're happy with the way things are and with the way the Canadian Wheat Board operates. Yes, I do pay them to do my job, and I'm happy with it. It's working very well.

In my situation, I use the Canadian Wheat Board and the cash advance system. The reality of grain marketing is that when you need money, you have to sell something. I got cash advances in 1995 and 1996. I took those advances, I took my initial price, I moved my grain on my delivery calls, and I fulfilled my contracts. I received almost $6 a bushel for my wheat in 1994, and almost $7 a bushel for my 1995 crop. My canola was in my bins and went for the high price in the spring.

With the Canadian Wheat Board system, I can afford to hold off on the open market. But if you want to erode the Wheat Board and put us totally into an open market, if we lose some of our Canadian Wheat Board system and if we end up in a totally open market when the Wheat Board isn't doing the job that it does now, I'll have to sell something at a low price at harvest time in order to meet my cash commitments. And that's grain marketing on the farm; that's reality. You sell grain when you need money.

Thank you.

The Chairman: Does anyone else wish to comment? Fred.

Mr. Tait: From my point of view, the very purpose of a democracy is not to end the debate, but to have the debate continue. It should be part of our whole society. From time to time within that debate, we'll take views or expressions of public opinion and then decide on a policy direction. We call these elections, we call them plebiscites, or whatever - in fact, your party is one that champions this sort of concept. But we never, ever consider destroying the institutions because the minority is more vocal than the majority. That is never considered anyplace in a democracy.

As for your reference to the Alberta plebiscite, the question was whether or not we wanted the freedom to market our grains through the Canadian Wheat Board or through the open market. It's hard to vote against freedom. But I had a question that I posed to Jake in a fax. If this is an acceptable way to determine a grain marketing issue, would it also be an acceptable frame for a question for a Quebec referendum? Quebec could ask its citizens if they want the freedom to be independent while remaining part of Canada. I know communications are not what they perhaps should be, but to this day I still haven't gotten an answer on whether or not it's an acceptable model.

Mr. Jake Hoeppner: I want to keep Quebec.

Mr. Tait: It's a valid comparison. If you're going to set precedents by asking those sorts of questions in order to determine how to market grain, you'd better not start discriminating on how you're going to frame the questions about how Quebec is going to remain part of Canada, about other issues on the Constitution, and so on. You have to use the same standard if you're going to call yourself a participant within the democratic process.

The Chairman: Is there anyone else who wishes to comment? I'm not going to force you to comment if you don't wish to do so.

Alan, you can comment breifly, and then we'll go to Keith. But please be brief, because we have other people here.

Mr. Kennedy: It's just a comment. Perhaps it's also a reflection on the point Fred made, because that's where the Alberta plebiscite has always struck me as a parallel to the Quebec referendum situation - the way in which the question was phrased, the way it was asked. But perhaps it's also a reflection of the mindset of the minority driving this demand for change.

About a month ago, in the letters to the editor column of our local weekly newspaper, a lady wrote in and was complaining bitterly. She felt the barley vote wasn't going to change the system anyway, that it wasn't going to make any difference at all. She and her husband were therefore going to have to live with the intolerable situation of sitting and watching their neighbours getting exactly the same price that the two of them got for wheat and barley. Now, I don't know how that strikes you, but it kind of hits me between the eyes somehow. I wouldn't want people like that as neighbours.

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Mr. Proven: I haven't seen the report you mentioned about the internal workings of the Canadian Wheat Board. Until I see it, we'll take your word for it that it exists and that it says what you say it says.

My observation over the last 10 years with the Canadian Wheat Board would be that as a farmer, if the dog is biting your ankle you might forget that the bull is charging at you. Because I think the Canadian Wheat Board has been under attack politically from within, such as when Charlie Mayer was the agriculture minister in charge of the Wheat Board. The attacks have been continuing from the outside. The government in Alberta funds organizations that want to attack the Canadian Wheat Board and bring it down.

If you want to end the acrimony, then let's get away from the ideological disputes we have and look at it as a business. You're hearing from everybody here that the Wheat Board does a good job for their business, and that's the way they like it. That's not status quo; that's 60 years of history of performance.

The Chairman: Thank you very much, gentlemen.

A comment to Mr. Tait about where we're holding the meetings. There's nothing we would like to have done better, Fred, than to go to many communities in each province. It is a problem of logistics. We know that. We did our best. We did want to come to western Canada. We could only make one stop in Manitoba, so we hope all roads would lead into Winnipeg. We know some roads are longer to get here. We would like to have done more.

We thank you very much for coming, sharing your thoughts and views with us. It is a debate that, whether we like it or not, is ongoing. We wish to continue that debate so that we can do the most for as many as we possibly can in the grain marketing system for the benefit of everyone in western Canada.

I'll now ask Mr. Hiebert, Mr. Rigby, Mr. Medd, Ms Wowchuk and Mr. Robson to come to the table.

Mr. Hiebert.

Mr. Eduard Hiebert (Individual Presentation): First of all, I thank you people for coming here to Winnipeg. I think it's much to be applauded.

Personally, I'm a third-generation farmer. I'm also a Manitoba Pool delegate. On the one hand, I have been part of and participated quite heavily in the Winnipeg Commodity Exchange in terms of marketing my grain. I would have been one of the few farmers still with a long contract when the 1994 canola hit its peak. In other words, I managed to make the most of that particular contract. However, because of the insider trading that was going on there and the lack of public information, I really got gypped out of the potential that could have come about there.

I brought forward some of that information to the Western Grain Marketing Panel, none of which was ever dealt with. So on the one hand I have a lot of participation in the open market, but on the other hand, I have also been twice a candidate in terms of the Canadian Wheat Board advisory.

I'm a very staunch supporter of the Canadian Wheat Board. However, one of the central tickets to my being a candidate was that I believe there are significant improvements necessary for the Canadian Wheat Board, such as the level of accountability to farmers.

In a sense, then, I put both feet on different parts of our world simply because that's how it is as far as our oilseeds and grains are concerned. I think I have a strong interest in both and a good knowledge in both.

I would say as a preamble to all of this that even though I work very extensively - and as I've already mentioned, I think sometimes I can do an awful lot better than the average - I find I spend much more time selling the little canola and flax that I do in comparison with the benefits I get out of it, because there's so much information that comes through on the open market that was yesterday's news when the big moves come, etc.

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There are four items I'd like to bring forward. The first is in relationship to the candidates, whether or not we're going to have elections etc. Having been a candidate, I think there's nothing in these rules that says anything about it. If we're going to allow things to continue the way they are and to use the processes we now have with the advisory group, we basically are shutting out individual farmers from the election process. We allow, on the one hand, national farmers unions to go ahead and run as candidates, or we allow people such as the Alberta government to fund the western wheat growers so that they then secretly have a slate of candidates who say they're all individuals. There's nothing in between. I don't think that's appropriate.

If we're going to have elections, we should make sure that the Canadian Wheat Board sends out two mailings to every Canadian Wheat Board permit holder because they're going to vote. There's no use doing it through the mail or through the media, etc., because farmers are such a small segment. Individual people such as myself do not have the funds to contact all these people. They already have to have specific mailings to the people. It doesn't cost them an awful lot of extra money.

If we're going to have elections, I would say make sure that you have two mailings: one mailing to introduce the candidate initially and then at least another five pages or so subsequently so that there's a bit of a dialogue. It's not expensive, but at least it makes sure that everybody has a decent chance to come up, and not just simply the well-heeled or the vested-interest groups.

Point number two: you have already heard a number of corporate groups, and I'll only deal with the ones on the social side. The Manitoba Pool has had an opportunity to speak to you. They've also had the opportunity through the PPI. They've been given an awful lot of time, so to say, but the real farmers have been given very little time over here, and I say that as a Manitoba Pool delegate.

They also brought forward, for example, on the cash market that only the Wheat Board should be able to buy from the grain trade. Even these guys in a certain sense, if we can excuse the language, are like pigs lining up at the trough. I don't think it's appropriate that the grain trade should have that kind of exclusivity to the stuff either. If there's going to be cash-tradable product, it should only come directly from farmers, none of this stuff in between. And I say that as a member and participant of the Manitoba Pool.

Point number three, I have also, which I didn't say in the beginning, been part of a group that has appeared before the Manitoba Public Utility Board in trying to come forward on better telephone service in rural Manitoba. I've had many years of participation there. I understand very fully what a regulatory body is like in a monopoly environment.

I've been there under both administrations, the NDP and Conservative. To some extent they're patronage appointments. Yet despite that those people ended up making much more appropriate types of decisions than the people who put them there, simply because the process requires through an administrative tribunal that they have to go ahead and take the facts, just like a court, and then make decisions based on that while applying the law. If they make a mistake either to fact or law, you march up to the court of appeal. You can do something about it.

To some extent the difference between that system and what you're suggesting is very much what is happening here. You have the opportunity to arbitrarily tell us five minutes is all you get. And that's in a sense what you are also suggesting through the current proposals for Bill C-72. We're going to have new members coming in, and yet there's no real way of holding them accountable.

If we're going to have a monopoly situation continue, I believe that the only appropriate way to make it more accountable is to have a few lay farmers elected, such as with the advisory committee, not by having full-time farmers run away from their work and become full-time board members. They then become a regulated body, much like the CRTC. I think that makes much more sense than this kind of charade we'll be going through with Bill C-72 as far as the representation is concerned.

.1730

Lastly, I would like to follow up with a brief letter I sent on February 12 via fax to the minister. It was in response to his letter that he distributed very widely to almost every rural paper.

I wrote:

On Bill C-72, changing the Canadian Wheat Board governance, you say: ``Being accountable to farmers, the `new' CWB will need to demonstrate its marketing effectiveness. If its performance is not satisfactory, its [majority farmer-elected board] can...ultimately change its marketing jurisdiction''.

This raises some questions which puzzle me, and I ask for your reply on the following:

Why does C-72 allow for decreasing jurisdiction but make no provisions for increasing jurisdiction for, say, oats and canola if farmers are more satisfied with the Canadian Wheat Board's performance than they are with other methods?

Why, with little incremental cost, does the barley plebiscite not contain a similar question for oats, canola, etc., as was requested by farmers and even allowed for in Mayer's recommendations?

Or do these realities confirm the interpretation given that the Canadian sign-off in Chile, preparatory to the 1999 World Trade Organization agenda, means that Canada has indeed agreed to eliminate state trading agencies like the Canadian Wheat Board? Such is my understanding regarding the CROW, first preparatory sign-off, then elimination. How is the above sign-off different from the CROW process?

As a last comment, on the question of how can we eliminate the rancour that's going on here between these groups, this is not a democratic issue in the largest sense of the word. The government, quite correctly, did not think that the cigarette runners should have as much room as the others did. They shut them down in a particular way. The people who are running grain are no different.

I believe this was asked before. As far as this committee going across Canada to try to get the widest amount of input and to make as many people happy, I don't think that should be the intention. I think the correct intention should not be to listen to Cargill, to the Western Canadian Wheat Growers Association, to the UGG, or to the pools; it should be to listen to the farmers. The farmers are the ones who are participating through the Canadian Wheat Board. It is that narrow group that should be the focus, and I very much encourage you to focus in that direction.

Thank you very much.

The Chairman: Thank you very much.

Mr. Rigby.

Mr. Grant Rigby (Individual Presentation): Hello.

Who are the decision-makers here? Are they the five gentlemen and ladies?

A voice: The Liberals.

Mr. Rigby: Are those the Liberals?

Voices: Oh, oh!

Mr. Rigby: Okay, so I'll address my comments -

The Chairman: Make your presentation to the committee and we'll see where it goes from there.

Mr. Rigby: I'm just clarifying who's here. Are there eight members of Parliament here?

The Chairman: Everybody around the table except the two on my right and the one on my left is a member of Parliament.

Mr. Rigby: Okay.

I'm a grain farmer from Killarney, Manitoba. I made a presentation to the Western Grain Marketing Panel one year ago and thought my job was done, but here I am today.

My presentation today is not as well prepared, so you're welcome to cut me off as you see fit. I have seven points I'd like to go through, but if we don't make it, that's fine.

First, with respect to federally appointed directors, there should be none or a maximum of one. The rest should be elected, preferably through a delegate or councillor structure so we know who we are voting for. That differs slightly from the current advisory committee structure.

Second, of these elected directors, I would like to have one group of them chosen specifically to manage research check-off funds. We have a situation now in which.... I wasn't there, so I'm not exactly sure what happened, but apparently about two years ago a five-year allocation of the wheat and barley check-off funds was directed towards Agriculture Canada research. I'm not saying that was wrong or right or inappropriate at the time, but my understanding is that it was not done in a situation of open competition. To an outsider, it appears a little bit like a federal government agency was ensuring the survival of another federal government agency by redirecting funds without open competition.

We need the best research we can get. Decision-making for research has to be done in an open competition. So I would suggest that the process be changed in the future.

Directors should be elected so they are accountable to me. I don't know who makes the decisions about where the fund goes. Again, I'm not criticizing where it is, but in the future....

Third, I'm not sure if the new legislation provides for this or not - I just have an interpretation of the summary - but I suspect it does. Simply, the new agency, the Wheat Board or whatever we call it, should be able to purchase grain directly from individual farmers or whoever they choose at the destination. In other words, this means right of direct delivery to the board's customers, particularly in North America, subject of course to the customer's minimum requirements for volume, uniformity, and performance guarantees.

.1735

Of course we would continue the equity of delivery opportunity, as traditionally, to remain proportional to the amount contracted to the board by each farmer.

The board would also continue to offer delivery opportunity via its country agents. We have several decades of a structure built up where the only way to sell to the board is through an intermediary, and we have a great deal of handling charges with their own momentum and their own internal vested interests. If we had some sort of bypass mechanism, it would force that whole sector into providing low-cost competition.

Number four on my list is that I would favour a Canadian and dual market within Canada for all grades of wheat and all grades of barley, if barley stays on the board. I have thought maybe barley should leave it, although I do respect the interests of perhaps malt and barley growers. But there's too much destruction to the feed market the way it is.

The reasoning behind a Canadian dual market for all grades of wheat is simply that I think currently pricing to Canadian mills is based simply upon a formula based out of Minneapolis. I believe by and large that's the case. I'm not sure I'm right on this, but I understand it's Minneapolis minus freight, which means the price they're paying would be no better than in an open market situation anyway, if that's correct. On the other side, if we're asking a higher price in Canada than an open market would deliver, then it's not fair to Canadian consumers.

So we could actually get more out of the Canadian market if we opened it up. We might have long-term deals with mills that are willing to pay a premium for preferential delivery to them.

The other interesting thing is we would encourage an increase in Canadian processing in Canada. The way it is structured now, if you put a mill just across the line in North Dakota, you have access to American grain and you have equal access to Canadian grain, with any Canadian mill. If you put it in Canada, you perhaps don't have the access to U.S. grain. Under this idea of an in-Canada-only dual market, it would be the only place in the world where you could contract directly with farmers or purchase directly from the central desk agency. This is where you'd put your mills; you wouldn't put them just across the line.

So there's an argument against both the continental dual market or the world dual market, as proposed by many, and there's an argument against a central desk in Canada. I'm really interested in high-grade wheats, with that comment.

Point number five, if I still can carry on -

The Chairman: We want to hear them all, so please move quickly through the last three, Grant.

Mr. Rigby: Okay.

We can do a more creative mechanism for the Wheat Board monopoly. I like the idea of having a central desk and being secure for marketing these things in the world, where we can extract a higher price, but it should not be illegal to export directly. Perhaps there could be an export tariff or some sort of regulatory structure where there's a small financial penalty, enough to detract from a lot of it going, but still respecting the principles of fundamental freedoms and liberties to earn a living.

Number six, a criticism of the Western Grain Marketing Panel report was that if we allowed non-registered varieties to be traded freely, we would have a potential contamination of our export wheats. That is nonsense, if we look a little more closely at how we control the contracts to the Wheat Board. Very simply, every elevator manager could collect a hundred seeds from every truckload that is dumped in the pit and keep that with the guy's name on it. Then if there were problems at the port or problems in the cargo, if somebody found some seeds of grandin in there, you'd know who put it in there, and they're legally responsible. That would pull it all into line right away. It just means forcing the honouring of contracts.

Number seven, just simply I'd like to prohibit this organization from investing any net earnings in investments - particularly physical handling facilities, processing enterprises, etc. - without getting the direct consent of each farmer. Those who are in are in and those who are out are out. Such an operation would be offered independently from board merchandising operations, for various reasons.

Thank you.

The Chairman: Thank you very much, Mr. Rigby.

We'll go across to Mr. Robson.

Mr. Ian Robson (Individual Presentation): Thank you kindly, ladies and gentlemen, members of the committee.

We taxpayers depend upon elected representatives to make decisions that benefit the majority of people in Canada. When we all sing ``We stand on guard for thee'', we mean ``Look out for each other's interests and well-being''.

``Stand on guard for thee'' means protecting social and economic policies that the majority of Canadians desire. CWB, as presently established, is desired by the majority of producers. A minority of producers have suggested the CWB be weakened. This is why the government has responded with the proposed amendments to the CWB in Bill C-72.

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Bill C-72 weakens the Canadian Wheat Board Act at the request of a minority of producers. Bill C-72 weakens the CWB at the request of civil servants who want Canada to conform to international trade rules that have not been developed yet.

This Standing Committee on Agriculture would be irresponsible with taxpayers' money if it did not consider in detail Bill C-72 and the consequences of these amendments upon the daily economic life of the farmers of Canada.

Each article of Bill C-72 should be rejected completely, since the majority of farmers who understand the consequences do not support this bill.

The Minister of Agriculture is, by these amendments, removing the ability to stand on guard for fair prices for all farmers. Pooling is the marketing method supported by the majority of producers because it satisfies all farmers' needs and in no way interferes with buyers' needs.

The U.S.A. has continually challenged the Canadian Wheat Board. These actions have caused many dollars to be spent by Canadians to defend the Canadian Wheat Board. When Canada wins each fight with the U.S.A over the CWB, we should expect to be paid by the U.S.A for the inconvenience caused to us, the durum challenge being one incident.

What about this committee or the minister doing the work of guarding my interests in asking for amendments that would seek and deliver compensation as a result of unfounded challenges to the CWB? What about this committee seeking amendments that would recover from the U.S.A and from the EC market revenues that were lost due to their policies?

We farmers who grew the grain and then have had it devalued due to the actions of other countries find the lack of Canadian support to be very galling, not to mention expensive. Canadian producers are out of pocket millions of dollars because of the actions of the export enhancement program. Trade rules mean nothing to the U.S.A. or to merchants of grain. You make a rule and you find a way around it. This is the way of grain markets ever since grain marketing has begun.

Canadian farmers have found the Canadian Wheat Board to be operating in our best interests. No evidence to the contrary has been substantiated. At each advisory election to the Canadian Wheat Board, farmers have elected people who support the Canadian Wheat Board over those who would weaken the CWB's power.

Some Canadian producers are challenging the Canadian Wheat Board powers in court and in the market. In the market, a buyout provision of the present Canadian Wheat Board Act allows and encourages individual effort to increase the market price, so this should not be considered to be a reason for challenging the Canadian Wheat Board. This is in direct opposition to what was just mentioned by my neighbour on my right. This should not be considered a reason to change the Canadian Wheat Board or to implement Bill C-72.

In the courts, these challenges to the Canadian Wheat Board are an attack on the taxpayers of Canada. The critics of the CWB have launched what they know to be frivolous court cases to make political statements.

It was just mentioned that there is no way to sell into the United States or to sell to a local buyer in Canada directly through the wheat board. This is a completely false impression that has been propagated in the country to result in the kind of bill we are being presented with and trying to discuss today. Elected representatives need to understand this and get past that kind of BS.

Perhaps those responsible for some of these court challenges should be paying the court time.

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It is the job of responsible politicians to take enough time to understand fully the effects of the proposed legislation. Extensive work and years of effort have won Canadian politicians legislative success with the establishment of the Canadian Wheat Board in the 1930s. Contrary to the thinking about government abilities, the Canadian Wheat Board is sixty years' evidence of a government success story.

The present commissioner structure is still the best management system, since it is important to have knowledge of such a vast enterprise held by several individuals working closely together, as opposed to having it come from the one chairman proposed by Bill C-72. Organizations headed by one person for any length of time have more problems in shifting to a new person when required.

The board of directors appointed or elected for policy-making presents a bureaucratic approach to marketing. We need the present adaptive and capable commissioner structure - adaptive to seeking buyers and making sales, as opposed to being adaptive to a minister's wishes or to producer whims.

The Chairman: I hate to interrupt, but can you wind it up in the next thirty seconds, please.

Mr. Robson: The present CWB advisory committee provisions need to be given more powers to make suggestions about CWB operations, along with ways to improve grain; ways to improve planting decisions; ways to improve delivery through the handling and transportation network; ways to improve the price obtained from sales efforts; ways to audit and check the performance of the CWB sales efforts; ways to assure that the CWB audits and the reports of CWB operations are accurate; the authority to investigate producer complaints with a view to resolving the issue; and ways to recommend who will be considered for appointment as a competent commissioner of the Canadian Wheat Board, someone who is in place on good-behaviour terms as opposed to pleasure terms.

I recommend the Dave Suderman article published in The Western Producer over the last two weeks. It explains a great deal about the operations of the board. Anyone who's interested can read that.

I also recommend that the committee review the judgment given in the Andy McMechan case by the judge in Brandon.

The Chairman: Thank you very much, Ian.

Mr. Medd.

Mr. Bruce Medd (Individual Presentation): I'm pleased to come before you, as I'm a farmer from right around the Birtle-Miniota area.

I was introduced to the Wheat Board when I was about six years old, back in the early 1930s. My neighbour came over once, around the time the farmers were about to have a vote on whether they wanted the board or not. He had two children, and he a large farm he had been given. My father had raised seven children, and he was having difficulties at that particular time, what with grasshoppers and everything else. He had 65¢-wheat, and he had to pay for his threshing in the fall. My neighbour didn't have to pay for threshing because he did it himself and had the money to do it. He said he didn't need the Wheat Board. But when my dad asked him how he was going to vote, he said he was going to vote for it because my dad needed it.

Now, I realize things have evolved between that time and now. We have now experienced the Wheat Board, and we have tested it in many ways. So I look at it from that standpoint now. I asked myself, and I asked my neighbours in the area, where it is that we stand today.

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Over the years I have been involved in farm organizations and so on, I've looked at these situations, and I find that a lot of these people now who would have said at that time that they didn't need it have now found out they do need it.

This is a little change for a lot of them, because I know a lot of them, when I first started in the organizations, were against having a wheat board, and now they are for it. They changed right around on their own. So things have changed. It has stood the changes of time.

Different comments have been made here a number of times, but I want to repeat two or three things I came here to say particularly, and want you to know about.

One is that I do not want an elected board, and we do not want anything to happen to the committee that we already have. That's not just my opinion, that's what the people in my area want. They don't want this thing to change.

As one man has already said along the line here, we do need accountability. We want more accountability for the Wheat Board. That opinion is very prevalent in our area.

Just before I quit, I'm kind of surprised.... I haven't really been to these kinds of committee meetings before in my life, but I was glad to be able to come here.

We look at this in a broader sense. Why did we have the Depression? What caused it? Without it, would we have a Wheat Board today? These things go through our minds all the time. If we hadn't had that Depression back then, would we have had a wheat board at that time? Would we have needed it?

So we ask, what caused that Depression? Was it just one of those cycles that come around that we have to put up with, or was it man-made?

I've looked into this now. I'm an uneducated person. I didn't go to university to learn all about economics and so on, but I have been looking into why it happened. What was the matter? Who started it? Why shouldn't we have a look at the very base of this thing? Who causes these recessions? Who causes the depressions? We haven't even looked at that. This was one of the main reasons the Wheat Board came in - because of this.

As I have seen it, I have found - and I'd like somebody to correct me if I'm wrong on this - that banks don't exist on behalf of the government. Banks exist on behalf of banks. Banks are an independent group, like the World Bank and the IMF - the International Monetary Fund. They contribute absolutely nothing to the economy of the country. They don't do anything.

The IMF is run like a world kingpin of international appointees, collectively not accountable to anyone, which is completely against our constitution in Canada, and as a matter of fact in the U.S. also. They can cause a recession and they can cause a depression at their own whim. In the 1920s we had a depression, man-made or bank-made.

The Chairman: Would you wind it up in the next thirty seconds or so, Mr. Medd?

Mr. Medd: Okay.

I want to mention again my most important concern: no elected board, and that C-72 stay the way it is - i.e., the way the board is right now. Don't touch it.

Maybe that's all I need to say. Thank you.

The Chairman: All right. Thank you very much.

Ms Wowchuk, welcome to the committee. Sorry you couldn't make it this morning.

Ms Rosanne Wowchuk (Individual Presentation): Thank you, Mr. Chairman, and thank you for allowing me to present now, since unforeseen circumstances prevented me from being here this morning.

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I'd like to take this opportunity to thank you for coming to Winnipeg and hearing the presentations today. However, I would also like to echo the words of other people who spoke earlier, in that I wish you would have been able to hear more of the farmers who are actually affected by this legislation. I hope you will make some provision so that perhaps people who want to make presentations or submissions in writing to have their views taken into consideration by this committee could do so.

The Chairman: Can I just...? I won't take this off your time, just to make that clear.

Anybody - we've made this clear from the start - can make written presentations. Unfortunately, eight people who asked to make presentations here this afternoon haven't shown up.

Okay, go ahead.

Ms Wowchuk: Thank you for that. If I know any of them on the list, I will be lettng them know they can still make a presentation.

My name is Rosanne Wowchuk. I'm a New Democratic MLA from the area of Swan River, which is north of here, and I'm the agriculture critic for the opposition. My husband and I farm in Cowan, Manitoba, and we farm on land that's been farmed by his family for close to 90 years. Our families have been supportive of and were involved in the establishment of the Canadian Wheat Board.

There are many stories that have been told by families about the difficulties people faced without the Wheat Board, and I don't think I have to reiterate those, because I'm sure you heard them earlier.

There has been a great deal of discussion recently around the Wheat Board. In January of 1996 we had the performance evaluation of the Canadian Wheat Board, followed by the government's Western Grain Marketing Panel. These reports formed an interesting contrast. The performance evaluation measured the benefits over time that the Wheat Board had provided to producers. The results are well documented and unequivocal: farmers are better off with the Canadian Wheat Board.

The marketing panel report, on the other hand, recommended a number of changes that would weaken the Wheat Board's ability to provide the same level of benefits. Unfortunately, it is the latter report that the Liberal government and this present Minister of Agriculture appear to have used as a basis for the changes to the Wheat Board Act contained in Bill C-72.

I also question the timing of the legislation. Because of policies of the federal government, farmers are dealing with grave changes from the loss of the Crow benefit and rail line abandonment. Ballots are currently being counted and collected from producers who voted on barley and the role of the Canadian Wheat Board. Right now farmers are experiencing a grain transportation crisis, with huge demurrage bills mounting every day. In Manitoba, farmers are facing the additional pressure of moving their grain to higher ground to escape what is expected to be the most significant flood in Manitoba this spring.

With all of this, there is little time to debate the important changes to the Canadian Wheat Board Act. The timing of the legislation appears to be more of an effort to appease a small minority of vocal producers before the next federal election. The marketing panel report referring to ``a growing number'' of farmers who are asking for more options and flexibility should not be used as a basis for these changes. The fact that the marketing panel could not and would not put numbers to this statement or back it with facts in any way means that we must move cautiously. Bill C-72 will have serious implications and there must be ample time for debate and discussions. Politics should not be allowed to dictate the timing of the legislation.

Looking at the legislation itself, the proposed amendments are clearly very complex and significant. In some cases, effects of the changes may not be apparent for some years to come. Having said that, I would like to explore just a few of the most serious concerns my party has with this bill.

It appears that the goal of greater producer representation on the board of directors is a key issue, but it is not guaranteed in the legislation. As the bill currently reads, proposed section 3.6 allows for the designation of one or more positions to be elected by the producers. My concern is that the wording of this proposed section is voluntary, in the wording ``may appoint'', as opposed to mandatory wording - for example ``shall appoint''. The minister would have the option of not designating one or more positions, or in fact designating only one.

As well, the appointment of the chair of the board and the president by the government is alarming. This makes this position vulnerable to patronage appointments and removes their independence from the government of the day. Unfortunately, producers could find themselves with an elected board who will have no real power when faced with the government's appointed chair and president.

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At this time, I would like to express my disappointment that the minister has not agreed to place members of the Wheat Board advisory committee in the position of interim directors on the board. Despite the minister's splitting of hairs about the difference between advising and directing, I believe as producer-elected representatives they have the credibility as well as the necessary knowledge to become interim directors. Furthermore, I am concerned that the government is eliminating the advisory committee after its current mandate expires in 1998.

Clause 22 of the legislation is an example of how the single-desk selling function of the board could be weakened. This section allows the minister to exclude from the purview of the Wheat Board any type of wheat or wheat produced in any area. It is surprising that the minister would want this type of exclusionary power, unless he wants to appease certain groups of farmers for political reasons.

The only decision-making left to the board is to decide whether or not the kind, type, class or grade of wheat is significant. Yet there is no definition of ``significant''. I am concerned that this section will be able to exempt producers in an area of the country where there is a greater opposition to the single-desk function of the board. Again, political expediency will overrule the wishes of the larger majority.

I want to add that there is an exclusion clause, but no inclusion clauses for different grains. Last summer I sponsored a survey that was published in the The Manitoba Co-operator and rural newspapers. Overwhelmingly, farmers responded that not only did they support the Wheat Board with its current functions, but they also wanted to see the Wheat Board expanded to include the marketing and selling of additional grains and oilseeds.

I find it distressing that under this legislation it appears that the producer will only be mandated to decide on the measures that will weaken the board. I would argue that the desire by the producers to have greater representation was to facilitate decisions that would strengthen the board.

The Chairman: Ms Wowchuk, can you wind it up in less than a minute, please?

Ms Wowchuk: Okay.

I have many other things that I would like to say that are in my presentation, and they have been covered off by other people. But I would like to say that I would hope that this committee will listen to the producers of Canada and look at ways to strengthen this legislation that will meet the best needs of producers and not bend to the will of a few, and take into consideration that, as others have said, American farmers envy us for the board we have, and look at ways we can strengthen this board so we can maintain it.

I have to say I'm a bit skeptical, because when I look back at what has happened with other committees, when we had the transportation committee going around, producers said that they wanted to see the Crow benefit maintained. Rather than listening to what the producers were saying, the Crow benefit was eliminated.

I urge this committee to listen to what producers are saying. Don't listen to the few and the minority who are asking for changes that will destroy single-desk selling. It is something we want maintained.

I will end with that and hope you will listen seriously to the concerns of producers in Manitoba.

The Chairman: Thank you very much.

We have 15 or 20 minutes, if any of the members wish to raise some comments. Glen McKinnon.

Mr. Glen McKinnon (Brandon - Souris, Lib.): Thank you very much, panel members. As I said earlier, I really got an appreciation of where most producers are coming from.

I think we perhaps need to get your individual definition on a few of the points. First, what do you believe to be the correct definition of the word ``accountability'' insofar as it applies to the farm community? I'm not looking at anyone in particular.

The Chairman: Does anyone want to comment on that?

Mr. Rigby: At this point in time, I think the farm community would view that to be an elected structure. I suggest an election where you actually know who you vote for.

Mr. Hiebert: I would counter that. I don't think elections necessarily add to accountability. I think accountability is where there is a responsiveness to the people, for example the farmers telling them something, that it's not just simply the fake act of listening but actually fully understanding and then making a decision.

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Accountability does not mean the people make decisions in such a way that everyone gets their way, but rather that there is a judicious decision then made on the basis of the information.

That's why I used the words ``administrative tribunal''. An administrative tribunal is charged with a very legal responsibility of making a decision in an accountable way. ``Accountable'' means listening to the facts and then using the application of law that is appropriate to those facts, not just having people who can simply do what they please because they're the elected people.

That comes closest to what I think is a real and sound definition of accountability. It's not despotic, nor is it laissez-faire, but it's very substantive and substantial in the best sense of the democratic process.

Mr. Glen McKinnon: But what structure fits that best, in your view?

Mr. Hiebert: I do believe the current structure is the one that does that. The only addition I recommended is that we have an administrative tribunal, such as with the telephone companies currently. In each province or domain, they run their own telephone company; however, as to how to regulate it, that's done now by the CRTC.

I'm recommending that basically farmers get a chance to regulate the Canadian Wheat Board. That does not mean these people are full-time employees. The current CRTC person, for example, does not run any one of the telephone companies. Basically it means individual people can come forward and make a legitimate case, then the Wheat Board has to make a legitimate case - for example, if we want to make new policies, etc. - and then the tribunal makes a judicious decision.

The Chairman: Ian.

Mr. Robson: I would mention that accountability has to do with the exact type of discussion we're having today about the issue of grain marketing, in this case. We're outside the realm of the day-to-day activity of a marketing enterprise. We're taking the necessary time to have the kinds of debates where certain people challenge ideas to see what is the best way to go.

The day-to-day operations of a marketing agency directly affect my income. We know buyers are buyers. In the business world maybe there's a deal today and maybe there's not, but you'd better have the product to sell today if you want to get the income, and you'd better not be spinning your wheels at discussions like this while there's a deal being made.

This is accountability. You have accountability in responsible commissioners who are appointed on good behaviour, for their competency. An element of producer involvement is more than warranted in some kind of amendment, but this bill doesn't propose any of those kinds of amendments. That's why I oppose this bill.

School teachers also should be able to grade certain responsible or irresponsible members of Parliament on this committee for their continued questioning along the lines of the irrational proposed dual marketing.

The Chairman: Rosanne.

Ms Wowchuk: You talked about accountability, and I want to say that's an important question and one the Wheat Board has addressed. It has become much more open to holding public meetings and commissioners are coming out and meeting with producers. The Wheat Board provides much more open information now than they used to a few years ago. That's one of the steps. That's how the Wheat Board is becoming more accountable to the producers.

The Chairman: Elwin.

Mr. Elwin Hermanson: I'll ask a question, but first of all I'd like a show of hands. If you were a member of Parliament, would you vote for this bill the way it stands now?

The Chairman: A show of hands doesn't go on the record.

Mr. Elwin Hermanson: Would anyone vote for it?

Mr. Hiebert: This bill would gut the Canadian Wheat Board.

Mr. Elwin Hermanson: So nobody would vote for it. Now my question -

Mr. Rigby: Just a minute.

Mr. Elwin Hermanson: Oh, I'm sorry. You would vote for it?

Mr. Rigby: There is no alternative.

Mr. Elwin Hermanson: Okay, now I'm going to give you a chance to comment. What would have to be done to this bill for you to be able to support it? Maybe you could limit it to one or two things. You could probably expand on that, but for the sake of time, please name one or two things you would do to this bill to make it supportable. I'm asking all of you.

Mr. Hiebert: I can start.

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The argument has already been brought forward a number of times, and I brought it forward the last time, when producers had the chance for the advisory vote. The parallel is that of someone who believes in the fidelity of marriage but is still catching a little on the side.

To a large extent, it's a question of how to improve something. If you want to promote fidelity on the one hand, what little things do you need to change in order to still have those things going on the side? I don't think you're asking a question that can reasonably be answered that way.

Mr. Hermanson: Okay, that's fine.

The Chairman: Would anyone else like to comment? Ian.

Mr. Robson: I'd like to make a comment along the lines of what could be changed. As I outlined in my presentation, I don't think this bill is addressing the ways in which to improve grain marketing from the farmer's point of view. We need more money in our pockets. That's exactly why everyone of us is here making presentations today. In some ways, we feel the price of our grain is not high enough. To get that higher price, we need a marketing agency that will do it. So you need amendments that will improve the grain farmers' planting decisions.

The Chairman: You gave those to us before, so there's no need to repeat them, Ian. They're on the record.

Rosanne.

Ms Wowchuk: As I indicated, I don't support the bill, because I think it weakens or moves away from single-desk selling. If this bill were to work toward strengthening the Wheat Board and toward bringing other grains and oilseeds under the board, then I would consider those kinds of amendments as better ones, as improvements to the Wheat Board. I guess that's the one thing. If this bill brought about a better pooling system and brought in other grains, then I would see it as a merit. But the amendments that are here are weakening the board, so the bill is not something I could support.

The Chairman: Grant.

Mr. Rigby: I just have two quick things. One is farmer-elected directors. The second thing is some way to soften enforcement of the monopoly in order that it's not a crime, but perhaps rather a financial penalty.

The Chairman: I'll go to a quick question from Murray, and we're going to end with that.

Mr. Murray Calder (Wellington - Grey - Dufferin - Simcoe, Lib.): Thanks very much, Mr. Chairman.

Rosanne, that was an interesting statement that you just made. And by the way, I was on the CN task force, but I didn't hear the same comment that you just made when I was out here going through that exercise.

I'd like to go to your single-desk selling comment. The canola board is a national board, not a provincial board. If you're going to incorporate canola into single-desk selling underneath the Canadian Wheat Board, how are you going to do that?

Ms Wowchuk: If there's a political will to do something, it will happen.

You've asked me a more technical question than I'm able to answer, but I believe you would have to work it through with the canola board. But the canola board is not a marketing agency. It has nothing to do with marketing, so I don't see where the problem would lie there. I think you have to address whether or not producers want their grains sold through a single-desk selling agency - and I have already indicated that this is what many producers have told us.

Farmers see the benefits they get from selling their grain wheat under single-desk selling. I know that a large portion of the canola growers, the majority of canola farmers, do not want to be marketing their grain or their oilseeds. They want to grow grain and they want the best possible return. If there is a way in which canola could be brought under the Wheat Board while getting the farmers away from having to watch markets every day, from having to play the stock markets on futures prices, then I think they would want that.

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As for the question about the canola board, I'm not sure how you would deal with it, but I don't think it would be a big problem, since they are not a marketing agency.

Mr. Murray Calder: It's going to be an interesting question. The president lives about fifteen miles away from me, so I'll ask him.

Ms Wowchuk: I would like to hear his answer.

Mr. Murray Calder: I'm looking forward to it too.

The Chairman: Mr. Hiebert.

Mr. Hiebert: I did come here in good faith and I hope this committee can deal with the recommendations in good faith.

I would also like to ask this committee to give an answer about whether or not this committee actually has an opportunity to do something and whether Parliament has an opportunity to do something, because as I understand it, another body of the government has basically already agreed to end state trading companies. A letter by one of the ministers has answered the question about what it will take for our state trading entities to be WTO-friendly. And for the Canadian Wheat Board, the answer was that the monopoly must be removed.

I will ask my question again. I came forward with good faith here and I hope you people are here in good faith, but if another arm of the government has done what they've done, do you really have any opportunity to move?

The Chairman: We came forward, Mr. Hiebert, with the bill as it was initially proposed to the House of Commons after first reading, which is a process this committee has used on a number of bills that gives the committee more flexibility in what it does with the bill in order to listen to the views of yourself and those of as many other people as we possibly can. And I will state that I am disappointed. There were nine other people - I just counted them - who requested to appear before the committee. They're not here. That's their decision to make. We had agreed to hear them. We would have had to shorten everybody's time, but we would have had everybody here.

We will take the views of all those people who were here back with us and go through the bill clause by clause, attempting to make as many amendments as we possibly can to improve the piece of legislation. Then it will continue through the legislative process in Canada, like every piece of legislation does. I don't know exactly what letter you're referring to from another department in the government. If you have a copy of that -

Mr. Hiebert: I don't have it here, but I'm certainly willing to pass it on.

The Chairman: - and if you would be so kind as to send whatever you have to the clerk,Mr. Toupin, you can get his fax number and do so. I think I am speaking on behalf of all of the committee members when I say we'd like to see that.

There is no question that whether we like it or not, we are going through a time of unprecedented change and unprecedented challenge in Canadian agriculture, and that's the industry we're all in. But what we should not forget - what none of us are forgetting - and what we all want to take advantage of is that we are also in a time of unprecedented opportunity.

We have to face the change. We have to meet the challenges. We have to beat the challenges so that collectively we can take advantage of the opportunities. And an opportunity - I'm speaking personally - is not successful unless things are made better for individuals in the industry as well as in the overall good of the industry. And of course that starts with the individual good of individuals.

Whether we like it or not - and again I'm speaking as an individual, not on behalf of the committee - we are likely going to face incredible challenges in state training agencies and in supply management, which some of the committee members have in their own farm operations.

And I don't know whether it's going to be satisfactory or whether any government in the world is just going to be able to say ``Sorry, folks, we don't want to talk about it.'' We are going to have to enter that debate collectively.

We met those challenges collectively before, for example, in the NAFTA challenge on supply management. With cooperation among the industry, the provincial governments, and the federal government, we met a challenge that a lot of people said we couldn't meet and beat.

The challenges will come forward, whether they come forward tomorrow morning on our farms or tomorrow morning in our offices. Our intentions are the best they can possibly be. We want the Canadian Wheat Board to do as much that is positive and for as many as it possibly can. And that's a responsibility we all have.

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Will it be able to do everything for everybody? Absolutely not, because we know that the views of what the Canadian Wheat Board could do or whether or not there should even be a Canadian Wheat Board are as different as those with regard to how bright it is at 12 noon and 12 midnight. There's an incredible range of views. We heard from 10 or 11 groups today, and I think13 individuals, and there isn't a whole lot of similarity between any two of those presentations. Now, there are similar things in many of the different presentations.

So that's the challenge we have, and that's the challenge we hope we can meet collectively for the good of our economy and, most importantly, individual Canadians.

Mr. Hiebert: I certainly agree with you that we're in very challenging times and that we have to make some radical choices in a whole host of areas and that in the largest sense of the word the tough get going in tough times. However, I didn't hear an answer as to whether or not we really do have an effective chance to make our decision or that by signing away these state trading companies another arm of the government has basically made all of this an empty exercise.

The Chairman: Unless you can show me otherwise, I would state very clearly that no arm of the Canadian government has signed away state trading agencies. I think I can say that very strongly.

There may be people in this room or in this province who have different views on state trading agencies. That's why I asked if you could get that documentation, if I can use that term, to the committee. I'm not speaking on behalf of the committee, but if you get it to us, we might want speak to those people as well.

Mr. Hiebert: Thank you, Mr. Chair.

Ms Wowchuk: Mr. Chairman, may I speak?

The Chairman: Yes, very briefly.

Ms Wowchuk: You said that you had heard from I think 13 individuals and that there was no consensus. I think that if you look at the record of the producers and the individuals who were presenting, perhaps there was one who spoke in favour of single desk -

The Chairman: No, what I'm saying is that there wasn't 100% agreement on everything. I said that there were many similarities among the presentations. There were common themes.

Ms Wowchuk: I hear what you're saying, as long as you don't go away from this meeting saying that there was no consensus among the producers and the people who were here.

The Chairman: No, I don't intend to say that.

Ms Wowchuk: I've been here for the afternoon, and the majority of the people are saying that there are problems with this bill, that it has to be changed or it has to be dropped.

The Chairman: We have heard that loudly and clearly, and we will do our best to make changes.

You have 15 seconds, Ian, because we have a plane to catch.

Mr. Robson: I realize that. I don't want to take too long.

I want to make a quick comment about the buy-back process, which I undertook on a deal I made, and I found it to be no barrier to my business. The only thing some people might complain about is that they will not be able in good faith to make a deal that's favourable to the individual producer because the buyer may not offer a high enough price. In some cases the buyer will offer a high enough price to make the buy-back deal operate, and in that case individuals are perfectly free, totally unhampered and encouraged to do a buy-back process.

All of this exercise needs to be put in that perspective. We have a circus going around saying that the buy-back process is unworkable.

The Chairman: I want to thank you very much, lady and gentlemen, for your contribution and cooperation. I think that because there weren't more here today it gave us more opportunity to have the dialogue, and we'll all benefit from that as well.

The committee will resume hearings tomorrow morning at nine in Regina.

The meeting is adjourned.

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