Mr. David Anderson (Parliamentary Secretary to the Minister of Natural Resources and for the Canadian Wheat Board, CPC):
Mr. Speaker, it is great to be here today to speak to this bill. We have obviously been fed some pretty thin gruel here over the last little while with a few blobs of misinformation, a hail of exaggeration, and maybe a pinch of almost undetectable truth mixed into a base of fear. The opposition is clearly trying to create fear. We think it is time to be far more responsible than that.
I am pleased to speak to this historic bill which would at long last bring freedom to western Canadian wheat and barley producers. It is a great recipe for western Canadian farmers: a cup of innovation, a healthy dollop of value-added jobs along with buckets of opportunity. It is all going to create a smorgasbord of a stronger economy for western Canadian producers. Our government's top priority has been the economy, which is why we think this is so important.
By now most western Canadian farmers have finished harvesting what is reported to be a high quality wheat and barley crop that will feed the world. If we remember the spring, there was a challenge to get that crop in. Our farmers have worked hard all summer and finally they have that off in good condition. They have managed that crop every step of the way. They seeded, sprayed, fertilized and harvested it, and this bill would finally give them the freedom to market it.
Many farmers are farming 5,000, 10,000, 15,000, 20,000 acres and we believe that all Canadian farmers should be able to position their businesses to capture the marketing opportunities that are open to them. They do not need anybody from downtown anywhere telling them what to do with their product. The last thing they need is people lecturing them from outside the designated area, especially when they come from areas where people are free to market their own products. Western Canadian farmers are capable of marketing.
I could talk for hours about how much energy has been put into this by so many people for so long. We are finally going to provide western Canadian farmers with that opportunity.
In the June 2011 Speech from the Throne our government reiterated our commitment and that was to ensure that western Canadian farmers have the freedom to sell wheat and barley on the open market. Today, we are delivering on that promise. With this proposed legislation, we would deliver marketing choice for western grain farmers. We are taking a phased approach to allow the industry time to adjust to the significant change to its business.
The minister has spoken to the overall themes of marketing freedom. I would like to walk members and others through the specifics and the significance of this bill.
The bill would change the Canadian Wheat Board marketing system in an orderly and phased approached. The proposed legislation would remove the monopoly of the Canadian Wheat Board, which for so long many farmers have asked for. It would allow the Canadian Wheat Board to be continued as a voluntary marketing organization for up to five years as it makes its transition to full private ownership. It would allow the Canadian Wheat Board to finalize the 2011-12 crop year.
I think this is important in order to avoid market disruption. The goal is for farmers and grain marketers to be able to start forward contracting to the 2012-13 year, well in advance of August 1, 2012, which is the start of the new crop year.
We owe it to producers to provide market certainty so that they can plan their businesses for the 2012-13 year. Frivolous debate and delay will hurt our farmers and our reputation as a reliable high quality grain supplier. I guess that is why I was so disappointed when I heard that the chair of the Canadian Wheat Board had bought the NDP caucus breakfast about a month ago and then begged it to delay this legislation in any way and so long that it would completely disrupt the market when it was introduced. That is not something that is in the best interests of our farmers.
Farmers want to know what their marketing system will be for the 2012 crop. We need certainty so that Canada can continue to sell wheat and barley, and maintain its reputation as a reliable supplier.
I should also point out that the opposition has left some impression that if the Wheat Board goes, the quality of our grain will go down. It is the farmers who grow the quality grain and not the Canadian Wheat Board.
I am tremendously proud of the work that has been done at the Swift Current research station over the years. It has been responsible for the development of most of the varieties that are grown in western Canada and it continues to do great work. From now on we will be able to keep all of those varieties in Canada. We will not have to watch folks across the border often growing varieties that the Wheat Board would not let us register in our own area even after they had been developed there.
The international grain trade works largely on forward contracting. We know, for future purchases and sales, if there is uncertainty in the marketplace about the rule of who can sell Canadian wheat and barley, there is a risk that buyers will turn to other countries to buy that wheat and barley. We do not want that to happen.
Canadian domestic millers and maltsters have told the government that they want to forward contract wheat and barley a year in advance to their bakery and brewery customers. They want this legislation to be in place as soon as possible. They would see January 1 as late but acceptable. We know the Canadian wheat and barley sector can meet international and domestic needs for high quality products. However, farmers and market participants both need certainty in order to plan their business.
During the transition period, the interim voluntary organization will still be called the Canadian Wheat Board. It will continue to offer farmers the option of pooling their crops with initial prices guaranteed by the Government of Canada, just as is done now. They will continue to benefit from a borrowing guarantee that is backed by the federal government and they will develop a business plan for the revitalization, which will be reviewed by the Minister of Agriculture and Agri-Food no later than 2016.
We fully recognize that there will be costs associated with this transition. The voluntary Canadian wheat board may be a smaller organization than the vast monopoly that exists today. The government is prepared to assist with the extraordinary costs associated with winding down the monopoly. Farmers have always paid the costs of operating the Canadian Wheat Board, and I need to point that out and emphasize it, but the government recognizes that they should not be left alone to deal with the costs of transition to a voluntary mandate. The government is ready to assist while being responsible for the use of taxpayer dollars.
During our extensive consultations, industry raised a number of valid issues around transition. Over the summer, our working group met a wide range of industry players. Their report does an excellent job of addressing the major transitional issues that will be faced by the trade.
I would like to talk about a few of those issues that have been raised by prairie farmers.
The first issue is the voluntary Canadian wheat board's access to elevators, ports and terminals. The working group on marketing freedom examined this issue in quite a bit of detail. It expects and we would agree with it that grain companies will be actively competing for grain volume on the open market. If farmers want to market through the voluntary wheat board, we expect it will be able to contract with grain handlers to handle this tonnage. This happens with all of the other crops.
Curt Vossen, the president of Richardson International, said:
|| I think you'll see more players, not less. There may be some joint ventures, some alliances, some mergers of new players and existing, but I think you'll see a proliferation because people will inherently want to get into this market.
That is exactly what we have seen happen in Australia over the last couple of years.
I would add that the elevator industry is onside with the direction that we are taking. Grain companies currently offer handling services to third parties who do not own elevators or port terminals, many of whom are actually their direct competitors.
Wade Sobkowich, executive director to the Western Grain Elevators Association, told the working group:
|| It makes good commercial sense for grain companies to provide services to the CWB, especially in circumstances where the volume of wheat and barley to be handled is significant.
There is precedent as well for competitive, farmer-owned companies competing in the grain trade through alliances and agreements.
I will give a couple of examples of where that will work and where it is already working. The Gardiner Dam Terminal Ltd. is a producer-owned company that has entered into a joint venture agreement with Viterra. They jointly own and operate an inland grain terminal located near Strongfield, Saskatchewan, and a crop input supply business near Broderick, Saskatchewan. This project will deliver better service to farmers while helping a farmer-owned company capture new growth.
Another great example of farmers taking control of the value chain is the Westlock Terminals, a new generation co-op in north central Alberta. This is a wholly, locally owned co-op. My colleague is very familiar with that, I am sure. It kept a local elevator alive while following the merger of Agricore and United Grain Growers 10 years ago.
Today, Westlock has 230 members and recently opened a new plant. Its general manager, Clifford Bell, said that marketing choice “will present WTL with opportunities that have never been seen before by our New Gen Co-op. The changes will provide us with new opportunities and ways of exporting grain”.
Those are just two examples of how farmers can take charge of their own financial future when they are given the opportunity. I see no reason that a voluntary Canadian wheat board cannot succeed as well.
The government will continue to monitor the elevator access situation and step in if needed. This staged approach will provide the necessary checks and balances to help ensure a smooth transition.
The second valid concern that is being raised is the issue of producers' continued access to producer cars. My area is particularly affected by producer cars. We use more of them than anybody on the Prairies. I used them myself for many years. I used them long before the Wheat Board was even interested in them.
I want to say up front that the Canadian Wheat Board monopoly has no bearing on access to producer cars. I also will say that I have been a champion of and have used producer cars over the years and many of the producers in the area were using those producer cars for decades. It was only in the last seven years that the Wheat Board has been involved with them.
The right to use producer cars is involved in the Canada Grain Act. The Canadian Grain Commission allocates those cars to producers. This would not change. Currently, the CWB manages the marketing of grain shipped in producer cars so shipments are related to a sale. Under the new rules, producers and short lines would be able to make commercial arrangements with the grain companies or the voluntary wheat board to market their grain. So it would just give more options to farmers.
Shortline Railways are expecting some adjustments as they would have more options of marketing partners for the grain volumes that they can attract from producers. I have met with many of the shortlines and I can say that the ones that are forward oriented anticipate great opportunities as we move ahead.
For example, Kevin Friesen, president of the Boundary Trail Railway Company, farms in Manitoba. He says that the government is listening and that he is optimistic about the future for shortlines and the use of producer cars. We are already seeing some very exciting partnerships and what the western producer called a breakthrough in railway co-operation. Mobil Grain Ltd. and West Central Road and Rail have teamed up to create Saskatchewan's 12th shortline railway. Big Sky Rail will run on 354 kilometres of track on former CN lines west of Lake Diefenbaker. President Sheldon Affleck, who has done a great job of running his short line, says that there is the possibility to probably at least double and possibly triple what has come off that line. In a short time, he says, that they have found terrific farmer uptake.
I would like to also take a minute to discuss grain quality. As I said earlier, it is farmers who grow the grain, not the Canadian Wheat Board. The quality will not change because of the changes we would make. The Canadian Grain Commission would continue to provide its services, regardless of who is marketing the grain. Our customers continue to choose Canada over the competition, not because of the Wheat Board but because of the relentless commitment to quality by all parts of the value chain and, I would say, including, first and foremost, the farmer, the producer.
The current CWB is an administrator and a grain marketer. It is not the decision-maker on varieties registered for production in Canada and neither are the grain companies. It is the Canadian Food Inspection Agency that oversees and approves the registration of wheat varieties. It is the mandate of the CGC to ensure Canada's high -quality standards are continued. Under marketing freedom, both agencies would be continuing their important work.
It is clear there would be much more opportunity for farmers to grow niche varieties of grain. This is an area where the Canadian Wheat Board has fallen down, even though, on the few examples where it tried it, it was very successful. It never developed this to the point where it should have been. Farmers are already aware that there are new opportunities and they are looking forward to taking advantage of them.
I should address the issue of the funding of future wheat and barley research and market development. I think it is important. I heard my colleague talking about it earlier and he clearly did not understand how it has operated in the past. I do not think he realized that there has been a voluntary check-off and that would continue. We understand that research is key in keeping our grain sector strong and competitive. I will assure members here and farmers that a deduction from producer sales would be established to continue the funding by farmers of those activities. Those funds would support the work that has been done by Western Grains Research Foundation, CIGI and the Canadian Malting Barley Technical Centre.
The deduction would be mandated for the government for the transition and, in the meantime, we will be discussing with the industry a long-term mechanism to support research and market development to keep our great industry moving forward. I think this is a good initiative by the government and will be welcomed by the industry.
Our government knows that innovation drives competitiveness in agriculture. We know we need to keep our wheat producers on the leading edge of innovation and this check-off would help to do that.
Fear is always the biggest enemy of change and we need only to look to the Australian experience to see how a wheat industry can prosper once a monopoly is removed. Australia minister of trade, Dr. Craig Emerson, recently said, “it was a remarkably smooth transition”. He continued by stating, “There is no call to go back, to turn back the clock”. He then said, “it's been one of the great reforms in Australia, and I'd certainly recommend it to everyone”.
Already, we are seeing that same kind of excitement and innovation building not only in Canada but across the continent as buyers begin to jockey for farmers' business. For the first time ever, the Minneapolis Grain Exchange will be accepting Canadian grain for future settlement. Rita Maloney, its director of marketing and business development, said:
|| We do see this as an area of growth potential for us as it will allow producers, elevators and marketers across Canada to be able to not only use the contract for hedging, but also be part of the delivery process in the future.
Meanwhile, ICE Futures Canada in Winnipeg is working on creating its own spring wheat and durum wheat futures contracts based in western Canada.
Also, the announcement last week of a pasta plant for the Regina area clearly highlights the great improvements that this change will bring about.
The potential that we have in western Canada from these changes is unlimited.
Marketing freedom will usher in a new springtime for Canadian wheat. Over the past two decades, we have seen wheat and barley acreage decline as farmers voted with their air seeders and turned to canola and pulses. A record harvest of canola is forecast this year.
We must not buy into fear. We must embrace a future, a future where producers will be able to manage their businesses with control over who they sell to, where young farmers will finally have the tools they need to make their dreams a reality, where entrepreneurs can harness innovation and add value to their crops beyond the farm gate, where there are new opportunities in grain marketing and where the property rights of all western Canadian wheat and barley farmers are finally restored.
The future of the western Canadian agriculture industry is bright. We are taking this historic and decisive action today to ensure certainty and clarity for producers and grain buyers, who will soon be entering into contracts for wheat and barley for the 2012-13 crop year. Forward thinking, not fearmongering, made Canada the world supplier of choice for wheat. As Marquis wheat did a century ago, marketing freedom will breathe new life into our grain industry.
The government is committed to delivering on our long-term promise to give western Canadian grain marketing farmers the freedom they deserve. The sky will not fall under marketing freedom. In fact, as the minister said yesterday, the sky will be the limit.
Ms. Niki Ashton (Churchill, NDP):
Mr. Speaker, it is an honour to stand here and represent the people of northern Manitoba, people who are truly a key part of the mosaic of Canada.
As the member of Parliament for Churchill, I am proud to bring forward their voices, the countless voices of Canadians who have come up to me from communities like Churchill, War Lake on the Bay Line, Thicket Portage, Thompson, The Pas where the train starts and people living in Carrot River Valley where they grow all sorts of grains, where they are part of the agricultural economy of the west, people from all across northern Manitoba and others from southern Manitoba, like communities like Dauphin, Swan River, Selkirk, from communities in my neighbouring province, Saskatchewan, from Prince Albert, from Indian Head, from Saskatoon, from Regina, from communities like Medicine Hat, and going further westward.
I have had the chance to hear from so many Canadians from my part of the country, from western Canada, who have asked me to bring forward their voices in this House, voices that have been represented time and time again, whether it was through the plebiscite, through voting for the directors on the board of the Canadian Wheat Board or through the messages they sent to their members of Parliament on the government side, messages that often went unheard, certainly in the last few months, the requests for meetings that were ignored from people across western Canada who said that they believe in the single desk but that they also believe in the need to have their voices heard.
We hear the government talk about freedom but what about the freedom for farmers to vote? Not only did the government completely ignore the plebiscite that was organized by the Canadian Wheat Board, but it followed that up by failing to follow the government act, the Canadian Wheat Board Act, section 47.1, which guarantees the farmers' right to vote on changes to the Canadian Wheat Board's marketing structure.
This failure to allow farmers to vote, to allow farmers who are raising families on farms or in rural communities, to allow the children and the grandchildren of farmers who now live in urban centres across western Canada to ensure that their relatives are being heard, extended relatives who are still struggling, running the family farm, to be heard, speaks to not just the complete disrespect of democracy in our country, but the most fundamental insult to western Canadians in this House, painting them as though they somehow all agree with what the government is saying.
Where is the proof? Where is the referendum? If the Conservatives are so sure, why do they not go out and poll the farmers? Why do they not go out and implement a real referendum so that we can hear farmers' voices directly?
I think we know why. It is because 22,000 people voted in a plebiscite to say that they wanted the Canadian Wheat Board, because a vast majority of farmers across the Prairies voted for directors who are pro-single desk.
To me and to, I think, so many of us living in the west, the fact that we have a government that fails to listen to the very voices of the people whose livelihoods are being threatened and are at risk, already at risk, might I add, given the economic situation in which they live, it is an absolute insult. It really shows how much the government is willing to take the west for granted.
I would like to share a story about a more personal connection to the Wheat Board and what it has meant, I think, for us not just here at home but internationally. When I was 17 years old, I had the chance to do a study, while I was on scholarship studying in Hong Kong, on the comparative advantage that Canada has when it comes to trading wheat. I had the chance to sit down with people at the Wheat Board, look at its sections in terms of research, hear from people in the sales department and listen to people who were part of the chain of production, going back to the poor, the farmer who produces that wheat.
I got to hear how important the work of the Wheat Board was in making sure that our product was the best product going overseas, knowing that the hard work of people in my hometown of Thompson was part of that chain to make sure Canada's best wheat got on the ship at the port of Churchill to go around the world.
I also had the chance to hear from our international partners, from our great trading partner, China, which knew that Canada is known for having the best wheat in the world. That brand of Canadian wheat was not Cargill's, nor Viterra's. It was not any corporation's. It was ours. It is ours. It has been the work of the Canadian Wheat Board working hand in hand with farmers, working hand in hand with producers, the people who work along the transportation lines, the people who work to make sure that our product gets overseas, that has ensured for so many decades that we as Canadians have been able to stand proud and call our wheat the best wheat in the world.
Now we have a government that is not only failing to listen to western farmers, but is all too happy to give that brand away, to give those investments made by hard-working farmers, by families, by rural communities, by communities across western Canada away, to give it to Cargill, to give it to Viterra whose stocks go up every time they hear from the Prime Minister or the Minister of Agriculture and Agri-Food. Those are the numbers to be noted, because those are the people who will benefit.
We often hear about the Australian case. Unfortunately, even in that discussion, the government has proven to be very misleading. In some ways what happened in Australia was different, but in many ways it tells us what awaits us down the road if the government's wish to dismantle the Wheat Board becomes a reality. Western farmers can look to Australia to know what is in store for them when the single desk is eradicated.
When the Australian wheat board had single desk power, Australian wheat could command premiums of over $99 per tonne over American wheat, but by December 2008 it had dropped to a discount of $27 per tonne below U.S. wheat. In three short years, Australia's 40,000 wheat farmers went from running their own grain marketing system, selling virtually all of Australia's wheat, which was 12% of world wheat production worth about $5 billion, on their own behalf to being mere customers of Cargill, one of the world's largest agribusiness corporations, which is privately owned and based in the United States.
Since 2006 the Australian wheat board's share of Australia's wheat sales has dropped from 100% to 23% nationally, with 25 other companies in the market all looking to make money on the spread between purchase and sale prices.
Australian farmer Ross Philips was interviewed about the loss of the Australian wheat board. He pointed out, “Be careful of giving away your single desk. You will get every single farmer competing against every single farmer”.
For the farmer there is nothing more difficult than selling grain to a trader who does that every day. If orderly marketing does not exist, we will see mass bankruptcy for farmers, and we have lost our premiums equal to about 10% to 15% of the price.
This is a voice from our neighbours, a Commonwealth country that has gone down the very same destructive path which the government is taking us down. The story here is not only is the government failing to give farmers the democratic right that they have in law to vote, but it is taking every single westerner for granted.
We in the NDP will stand to fight the government's plan. I look forward to working with western Canadians to make sure that our voices are heard in this House of Commons.