Proceedings of the Standing Senate Committee on
Agriculture and
Forestry
Issue 9 - Evidence - Morning sitting
EDMONTON, Wednesday, April 1, 1998
The Standing Senate Committee on Agriculture and Forestry, to which was referred Bill C-4, to amend the Canadian Wheat Board Act and to make consequential amendments to other Acts, met this day at 9:05 a.m. to give consideration to the bill.
Senator Leonard J. Gustafson (Chairman) in the Chair.
[English]
The Chairman: Honourable senators, ladies and gentlemen, we will call our meeting to order. Our first witnesses are the Wildrose Agricultural Producers, Mr. Rod Scarlett and Mr. Neil Wagstaff.
Would you tell us where you farm and a little bit about your operation.
Neil Wagstaff, First Vice-President, Wildrose Agricultural Producers: I am Neil Wagstaff, a grain farmer from Elnora, which is southeast of Red Deer.
Rod Scarlett, Executive Director, Wildrose Agricultural Producers: I am Rod Scarlett. I have a small farm right across from Senator Taylor's place.
Mr. Wagstaff: I attended the hearing in Calgary yesterday as an observer. As I was driving up here last night, I thought about all the controversy that surrounds the CWB, and I thought that I would just throw out my own personal thoughts before I make my official presentation.
I think there are actually two debates involving the CWB, and they do not necessarily involve Bill C-4. The problem is that these two debates continually get muddled. The first deals with what the best marketing system for the grain would be; that is, which system would give the best return to farmers. The other debate is a fundamentally philosophical discussion about how a democracy should operate. In my opinion, we are constantly getting those two aspects muddled together.
Wildrose Agricultural Producers is Alberta's general farm organization. It has only operated under that name for two years, but it comes from a long line of other general farm organizations in Alberta.
Bill C-4 has the potential to fundamentally alter the way in which grain is sold in Western Canada. This may be a very simplistic evaluation, but the fact remains that this bill impacts nearly every farmer and rancher in the region.
Our association strives to create an atmosphere of cooperation and communication in order to ensure that areas of common concern to producers are dealt with to the benefit of agriculture as a whole. Wildrose Agricultural Producers is Alberta's largest producer-funded general farm organization -- we are not a one-issue organization, and we have members from all sectors of agriculture -- and our membership is still growing.
An election process is outlined in Bill C-4, and our organization wants to ensure that a fair and democratic process takes place. This process would allow producers to select directors for the CWB who represent the best interests of the majority of producers. The CWB should be governed by a method that begins at farm level, and the election of ten directors is one method of partially achieving this goal. In our opinion, however, it is not as effective as it could be, and creates a myriad problems surrounding an election, not the least of which is the fact that the election process itself is not clearly spelled out in the act. How this election takes place will have significant implications for how the CWB functions in the future.
There have been many concerns raised regarding how the election will work, and we feel that more detail regarding the election process should have been included in the bill. Concerns that need to be addressed include the qualifications of candidates, who is eligible to vote, the need for regulations governing conflicts of interest, election spending guidelines, public reporting and accountability of campaign funding, nomination procedures, and geographic distribution of the directors.
Wildrose has been a leader in the growing campaign to have the CWB directors elected through a delegate system such as the one a number of successful cooperatives in Western Canada have used for many years. Such a system has some faults, but Wildrose believes the advantages far outweigh the disadvantages. The delegate system is the one which is best able to represent regional and philosophical differences, while at the same time allowing for a majority opinion. The most important aspect of a delegate system is that it provides a means of ongoing accountability to grain producers in Western Canada. Further, a delegate body would provide a much-needed means for good communication between the CWB and producers, and it would create an opportunity for a periodic review of the directors and of the Wheat Board's activities. It would also go a long way to bridging the gap between the pro- and the anti-Canadian Wheat Board factions.
Wildrose believes that there are enough potential problems associated with the direct election of a board of directors that the whole process, if not carefully and properly organized, could ultimately lead to the demise of the Canadian Wheat Board.
We believe that the merits of the delegate system have not yet been given adequate consideration, and it has been criticized for being cumbersome, more expensive to the minister, and unnecessary. Wildrose believes that the extra work required to conduct a delegate election and to maintain a delegate system would be well worthwhile, as it would allow farmers to have truly democratic control over the future of the CWB.
Whether we have a delegate system or a direct election, we believe that preferential balloting should be seriously considered. We know that the use of a preferential ballot is gaining a lot of support from many farm organizations across Western Canada. When there are more than two candidates, traditional voting methods are quite likely to have people elected who are not supported by the majority. A voting method where electors must choose their first, second, and third choices is somewhat more difficult to tabulate, but it will ensure that individuals elected clearly have the confidence of the majority of producers.
It is our opinion that the inclusion/exclusion clause has generated far too much attention, and that concerns have been blown out of proportion. As a result, not enough attention has been paid to other parts of the bill -- parts which are far more important, and which could adversely affect producers. With ever-changing world economic conditions and circumstances, it is difficult to know which marketing techniques will be the most appropriate in the future. Bill C-4 must allow for possible future change to the Canadian Wheat Board mandate. Further, the inclusion provision adheres to our organization's belief that producers should have the right to democratically decide how their products are marketed. Wildrose is concerned that the Senate may recommend that this provision be removed.
Wildrose believes that the exclusion clause has, in, fact made it easier to remove grains from the CWB than to add them, and we have concerns as to how and what producer groups will actually be recognized as representing a commodity. To that end, some type of electoral process should be included in the legislation. Questions such as who represents a commodity group, and whether 50 per cent plus one ought to initiate CWB action, should be addressed by the legislation, and not left to regulations or to interpretation by the judiciary.
We believe that inclusion or exclusion ought to be able to be initiated by any producer group that can establish that it represents a significant number of that commodity's producers. We suggest that a petition from a certain percentage of qualified producers would be adequate to require a plebiscite of all producers. In addition, some of our members actually wonder why commodities other than the specified grains, particularly pulses, should not also be considered.
If the Senate feels it is necessary to recommend change to this provision, Wildrose wants to be assured that some process is kept in place which allows future changes to commodities marketed by the CWB, and which ensures that producers have a democratic opportunity to decide if such changes should take place.
The producer-financed contingency fund has generated the least amount of public debate, but it could have the greatest impact on farm cash flow. How this fund is operated is not in the legislation, so it will be developed by regulations. We would like to see the legislation more clearly outline the purpose of this fund. Also, the size of the fund should be restricted so as to avoid a further unnecessary drain on farmers' already tight cash flow.
The required size of such a fund is determined by the amount of risk that needs to be covered. If a large fund were to be allowed to develop, the CWB would probably take more risk, and more risk could eventually become too much risk.
As long as the federal government maintains any control over the Canadian Wheat Board, it should not be necessary for producers to provide such guarantees. Historically, interim payments have never been announced until market conditions warrant an increase. Canadian grain producers have been forced to compete with the treasuries of the U.S. and the European common market, as they subsidize their exports.
The government is still going to provide a number of financial guarantees, and to make the producer finance a contingency fund will only further add to the financial burden placed on farmers. Growing transportation costs, input costs, and decreased levels of government support, both federally and provincially, have needlessly pushed grain producers close to the brink of financial disaster. Due to the low risk involved, the federal government should continue to provide all the necessary guarantees.
We do have other concerns, but I think that we will leave those to the discussion period. These concerns are in the area of cash buying, shorter pooling periods, non-domestic grain purchasing, and the election process.
Senator Fairbairn: Over the course of our hearings, we have heard a great deal of comment on how an election should take place. The delegate system has been mentioned by a number of witnesses. This, however is the first time we have actually such a system spelled out in detail as a possible model. That is very helpful. Having provided such a model, is it fair to assume that you believe that the fact that the majority of the directors will be elected by producers is a good thing?
Mr. Wagstaff: We feel it is a step in the right direction.
Senator Fairbairn: You would, however, like to see the entire board elected?
Mr. Wagstaff: Yes.
Senator Fairbairn: Could you explain to us what you believe to be the problems with a one person/ one vote system?
Mr. Wagstaff: Many of you have been elected to parliament, and you know how large some rural constituencies already are. Each of the areas selecting directors is larger than any of the federal constituencies in the region.
To start with, the dynamics of running for a position and getting to know the producers in a particular region, as well as their sentiments, are almost insurmountable. Further, considerable funding will be needed to properly run a campaign, and funding leads to influence. We are quite concerned about who will run, and whether or not the election of a director will be based on his or her abilities or on a popularity contest. We have no idea what might unfold, but we do see difficulties.
Senator Fairbairn: It has been suggested by witnesses from across the Prairies that, even if there were elected farmers on the Wheat Board, they would not be able to amass the necessary influence to allow them to follow the wishes and best interests of producers. When a majority elects people to these positions, that in itself produces a measure of influence and power that goes beyond the wording of clauses in a bill, and it is not a small part of this bill.
I have great faith in the abilities of farmers to use whatever electoral process is in place to come up with a very powerful group of individuals to serve on this board. Would you share my confidence that, since the majority of the board will be made up of producer representatives, the producers' directors will, by their very presence, have an influence on the future marketing prospects of the CWB?
Mr. Wagstaff: I agree with you wholeheartedly. One of the reasons that we feel the election process to be so critical is because we do see that having ten producers on the board of directors will have a significant influence over the operations of the CWB, and its future. Even though we have a number of other concerns about Bill C-4, the election process is paramount.
As to the delegate system, I believe that, whether we have a delegate system or not, it will be necessary for those who are elected to develop some sort of informal delegate system in their areas, a network of some sort. There will have to be some kind of organization behind it, and something formal would be better than something which is left up to the individual directors.
There will have to be some kind of a network or organization behind the board of directors. Communication between producers and the board of directors is fundamental, and, unless the directors have a delegate network, that communication will not take place.
Senator St. Germain: How does one define a "producer"?
Mr. Wagstaff: We made our presentation when we made our presentation to the committee of the other place. A producer is a grain permit-holder and anyone who is eligible to become one.
Senator St. Germain: Anybody that sells will be a grain permit-holder. You did not mention your membership numbers. Did you do that intentionally?
Mr. Wagstaff: No, I did not. When I was at the hearing in Calgary yesterday, I felt that some of the organizations were being deceptive in terms of the numbers that they represent.
We are a voluntary organization, so our members are voluntary, and we do not have a high intensity campaign for membership. Our official membership at the moment is hovering at around a thousand farm units. We do have over 6,000 farm units on our mailing list, however, and that indicates the numbers that we represent. We also have a network across the of regional directors and districts across the province, and through them we can keep in touch with the farming community.
Senator St. Germain: If they are to be responsible by virtue of building a contingency fund, do producers feel that they should have all producer representation on the CWB?
Mr. Wagstaff: I think producers would be more accepting of a contingency fund contribution if they knew that they had total control. As long as the government has some influence on the board of directors and on how the board operates, however, it should maintain its share of the responsibility.
Senator Spivak: This is a very detailed paper, but I do not think it says anything about the funding. Do you think there ought to be strict rules in the regulations about election funding?
Mr. Wagstaff: Yes, absolutely, and public accountability just as in the Canada Elections Act.
Senator Spivak: There should be strict rules about that, then. You mentioned the cash buying, but you did not go into it. Would that affect producer acceptance of pooling, and could farmer confidence in, and acceptance of, single-desk selling be sustained?
Mr. Wagstaff: Any intensive use of cash buying will jeopardize the fundamental pillars of the CWB.
Senator Spivak: Why do you think it is in there? Could you comment on why you think it is in the bill?
Mr. Wagstaff: I think that it is there because there may have been the occasional unusual circumstance when it could have been of benefit to the Pool accounts, and because there are certain farmers who would prefer to sell their grain in that situation, and play the market somewhat.
The risk of cash buying is that it has the potential of having a negative impact on how the Pool works, as well as of causing more controversy between farmers. It is something that we have to deal with very cautiously, but perhaps we ought to recognize that, in certain circumstances, it should be used.
Senator Hays: You spoke about inclusion as a possibility because it might be a marketing choice that farmers want to make. Would that be a two-thirds majority on a producer vote?
In your paper you suggest the annual election of board members by delegates who are themselves elected for, let us say four years. Is that not too short a string?
Mr. Wagstaff: I will deal with your second question first. In the delegate system, it would likely be more of a review than an election. There would certainly be an initial election, but we feel there is a need for some kind of reporting back to the delegate system.
Your first question dealt with inclusion and exclusion. Yes, we would agree that such fundamental change ought to require support from two-thirds of producers. I want to point out, too, that all too often people only talk about single-desk selling inclusion or exclusion. As we read it, the proposed legislation does not say that it is always single-desk selling. It could well be that there might be a request for a farmer vote to have a commodity under the CWB's jurisdiction as a voluntary grain.
If the Senate sees that a change in Bill C-4 is needed on inclusion/exclusion, we would fully support what Minister Goodale proposed as an amendment just prior to it being passed. We do not see any difficulty in that proposed change.
Our main concern is that a clear process must be laid out, whereby the producers of a commodity have to vote to change its status in the Wheat Board. Who exactly is a producer of a commodity is a shady area, though. It is difficult to deal with, because you may have to do so on a historic basis; that is, define a producer as someone who has produced that commodity for the last five years. The ones who have the capability of producing the commodity are even harder to define.
Senator Whelan: I was a long-time activist in farm organizations and with the co-ops, and I was elected a director at large in an election where all of the delegates voted, but others were elected by region. Would you be in favour of that kind of an election?
Mr. Wagstaff: I guess we would not be in opposition to it, although I would have to ask about the organizational dynamics, because of the geographical size and distance involved. We have not really thought about it.
Senator Whelan: Do you think that the method of electing ten directors and appointing five is less democratic than the election of the 11 member advisory board currently is?
Mr. Wagstaff: The advisory committee was strictly an advisory committee, and as such a lot of producers did not take some of those elections as seriously as they should have. I think that they will take the election of the board of directors a lot more seriously.
Senator Whelan: If I understand correctly, Bill C-4 does not say who these five appointed members have to be. They could be from any part of Western Canada, and they could all be farmers, too.
Mr. Wagstaff: They could be from other parts of the country, too, and they do not necessarily have to be farmers.
Senator Whelan: I have a list here of the donors to the Western Canadian Wheat Growers. This list includes platinum sponsors, gold sponsors, silver sponsors, bronze sponsors; companies like New Holland, Grand Industries, the United Grain Growers, and the Royal Bank. Do you think that they all should vote? I do not see your organization on there.
Mr. Wagstaff: No, it is not. Further, our organization does not have that kind of sponsor. Wildrose is strictly producer-funded, which is one of the fundamental changes that took place when Unifarm folded and Wildrose began.
Senator Whelan: Should an organization be called a producer organization when it gets the majority of its funding from other sources?
Mr. Wagstaff: I think that is another debate, Senator Whelan.
Senator Whelan: They get a lot of publicity as they are representing the wheat growers of Western Canada.
Mr. Wagstaff: In Bill C-4 it does not clearly say that those who run for election to the board of directors must be producers. As I read the bill, anybody could run.
The Chairman: The bill considers membership in the board of directors to be a part-time job. With just ten directors, or even with 15, it would be difficult to do an adequate job of representing the CWB both in Winnipeg and in the region.
Mr. Wagstaff: That has been a concern of ours. It clearly has been indicated that it should be a part-time position, but I would equate it to the job of an MP, which is why we feel so strongly about the delegate system.
The Chairman: Thank you for appearing this morning, and for presenting this brief for our consideration.
Mr. Wagstaff: Thank you for giving us the opportunity.
The Chairman: We call the Alberta Grain Commission. Will you give us your names, and tell us where you farm?
Ken Motiuk, Alberta Grain Commission: The Alberta Grain Commission appreciates the opportunity to address the Senate Committee, and we compliment your committee for holding these hearings.
My name is Ken Motiuk. I farm at Mundare, Alberta, about 50 miles east of Edmonton. My wife and I operate a mixed farm operation, growing grain oil seeds and pollscraps. We also have some livestock. With me is Gil Balderston, who operates a grain farm with his son up in Sexsmith, in the Peace River district of Alberta.
I will give you some background on the Alberta Grain Commission. We were established in 1972, with a mandate to review any and all matters related to the grains industry, and to make appropriate recommendations to the Alberta Minister of Agriculture. Our aim is to make recommendations that foster the ongoing growth and development of a viable grain industry, and we maintain close liaisons with individual farmers and farm organizations.
We feel that Bill C-4 is fundamentally flawed. Farmers want marketing choices, not simply a rearrangement of the deck chairs on the Titanic. The Alberta Grain Commission held a plebiscite in 1995 on wheat and barley marketing. The results showed that 66 per cent of participants wanted the freedom to market their barley to whomever they chose, including the CWB, while 62 per cent of farmers wanted the freedom to market their wheat to any buyer, including the CWB.
We held some focus group meetings earlier this year to glean some information from Alberta farmers for the Estey hearings, and we asked some questions on grain marketing there. Once again the results showed a very strong majority of farmers, two-thirds to 75 per cent, wanted some choices as to how they marketed their grain.
Bill C-4 re-enshrines the subservience of western farmers to Ottawa. The CWB obtained its monopoly for exporting grains during World War II when the government wanted to control food supply and prices. This monopoly continued during the 1940s, in order to provide cheap food to Britain as it rebuilt after the war. Western farmers paid the price for this control, and I think it is time to debunk the myth that the CWB was established for their benefit once and for all. One simply has to read the Honourable Mitchell Sharp's biography to find this out.
Western farmers are the only ones who must have their products confiscated by the state for resale. Ontario farmers will soon have the opportunity to export directly to the United States. Why must we have this double standard? Are western farmers somehow less intelligent than eastern farmers? Why must we be treated differently than eastern farmers?
Most MPs come from ridings east of the Ontario/Manitoba border, and it was the tyranny of that majority that rammed the legislation through against the wishes of western representatives, while at the same time allowing their own constituents to export grain directly to the United States.
The government is seeing the benefit of deregulation in many industries in the economy. We have seen it in telecommunications, where we now have low long distance telephone rates, and in broadcasting. We have also seen deregulation in transportation, which helped the government sell CN.
The government has embraced CUSTA, the WTO, and the Canadian economy is booming. The current account deficit is gone, and we are paying down the debt under this new regime. At the same time, however, western farmers are singled out; they are not able to manage their own businesses and participate in the new globalization of the world economy.
With respect to Bill C-4 clauses individually, we feel that some of our recommendations could be incorporated into a bill, along with voluntary provisions or voluntary marketing provisions.
Under Bill C-4, the government still appoints the CEO or the president. That essentially leaves the board of director as a toothless tiger. The board of directors can say anything it wishes, but, if only Ottawa has the power to remove him or her, the president does not have to listen to the board. He or she may instead choose to take orders from Ottawa.
That leads us to another issue; Ottawa retains control under the current Bill C-4. The bill reads that the Governor in Council may direct the board with respect to the manner in which it conducts, exercises, or performs its business. If farmers are, in fact, in control, why does Ottawa maintain this control over the board?
The bill also states that the board of directors must act in the best interests of the corporation. If this bill is so good for farmers, why does it not state that it should act in the best interests of farmers? It also says that the CWB must market grain in an orderly manner. I have never been able to find anyone who can say what orderly marketing is. Why does not it simply say, market grain to maximize profits to western farmers?
Accountability for the organization can only be achieved if farmers have the option of taking their business elsewhere if they are not happy with the performance of the CWB.
The current system no longer works for wheat and barley. Oats were taken off the CWB, and we now export over a million tonnes a year to the U.S. Such good experiences show what can be done with a crop, and how, once liberated from the shackles of the CWB, marketing and production will flourish.
We have seen a tremendous growth in the acreage of non-board grains, such as canola and peas. These are non-board crops marketed in the open market, and farmers call them cash crops. Why? The answer is that they can be readily marketed for cash, and that farmers can make money growing them.
There is no reason that we cannot have wheat and barley marketed in a similar fashion. We are seeing more and more problems with the feed barley export pools and the sourcing problems that the Wheat Board is having. Early in March at Grain World, the CWB itself suggested that it might be out of the world barley market in 1998 and 1999 because it is having trouble sourcing barley for export position. We are shutting ourselves out of this export market, while not allowing the private trade to enter it.
If we consider the pool return outlook that the CWB published last week, we see an estimated net price, depending on where you are in the Prairies, of $.75 to $1.75 a bushel for barley. How can farmers survive on this kind of pricing? Manitoba farmers, because of high freight rate, could be looking at a price of 75 cents a bushel, a portion of which will come in a final payment after the new millennium.
The Alberta Grain Commission maintains that we should give the Wheat Board the tools it needs to effectively compete in a dual market, and that we should then be given our freedom. If the Wheat Board's reputation in the world is good, it need not fear competition.
There is a myth out there that says that the CWB cannot compete in the dual marketing system. We do not believe that to be accurate. The CWB can contract with farmers for supply. Farmers can opt out of dealing with the board for one year or a multiple number of years, and choose one way or the other. That way the board will have security of supply to fulfill its export contracts.
Allow the Wheat Board to cash buy, and allow it to have shorter pool periods so it has the tools to compete with the open market. If we had a voluntary marketing system, we would not have to deal with the inclusion or exclusion clauses anymore.
There is also evidence that the CWB has not done well in the pricing of wheat on the export market. Recent studies by Blair Rudder at United Grain Growers have shown that U.S. farm gate prices, after adjusted for currency, are netting farmers in the U.S. at least $1 more per bushel than Western Canadian farmers.
U.S. farmers have the ability to manage their risk through use of the futures market and marketing to whichever buyer pays the best price. We will table an article with the committee from the March 1998 Country Guide. The title is "Futures Make Money for Montana Wheat Growers," and it shows how proper use of the futures market allowed American farmers to get three years of high wheat prices from a one-year wheat bowl market. Given today's knowledge level, communications abilities, and marketing conditions, that is more than possible to do. Here in Canada, however, we had to stand by while our pros dropped every month, watching the CWB chase a falling wheat price market. The proof for this can be seen in the prices that we got for our grain in those years.
Farmers run sophisticated businesses now. We manage high cash flows, and we have large investments. We are no longer the subservient peasants of the 1930s and 1940s, humbly driving our wagons to town, only to hear that the price of wheat has dropped $.25 a bushel. This is not the world in which we work in the year 2000, and we need to be equipped with tools that will allow us to produce grain in the 21st Century, not the past.
The benefits of the monopoly are largely supported by myth and folklore. Our specific recommendations on Bill C-4 would make the method of grain marketing in Western Canada voluntary, as it is in the rest of Canada. They would also allow the elected board of directors to hire and fire the president and CEO, and amend Bill C-4 that the board must act in the best interests of farmers and with the objective of maximizing returns to them. Lastly, they would give the new CWB the tools necessary to compete with the private trade and thus to capitalize on its reputation world-wide. Those marketers who gave farmers the best deal would be the ones to survive and get the business.
We feel that the Wheat Board and the federal government are not reading the views and opinions of the majority of western farmers correctly. Farmers want options, and they want choices. We have had focus group meetings, and we have had plebiscites in Alberta to back this up.
An unchanged Bill C-4 will cause the acrimonious and divisive debate to continue. It is a waste of time and energy when we should be at home running our farm businesses. It is our grain. It is not the government's grain, nor is it the Wheat Board's grain. Let us manage our business as we see fit.
The Chairman: If a farmer were allowed to contract, say, 25 per cent of his crop outside of the Wheat Board and 75 per cent within it, and if that were set several times during the year, would that kind of a system work?
Mr. Motiuk: I believe that the issue of security of supply is an important one, and there are various ways this could be worked and negotiated. The current contracting system is a bit of a joke, though, because it is a one-sided contract. The farmer says how much grain he wants to contract, and the Wheat Board then says how much of it it will take. It is really a one-sided contract.
We could probably live with a system where every farmer would say what percentage of his production he would contract with the Wheat Board, which would allow the CWB to know that it will get that grain.
The Chairman: That is the point I make.
Senator Stratton: We must recognize that the federal government still has a fairly significant stake in all of this, and will likely continue to do so. They want to have five people on the board, plus the CEO, which I think is arguable, because the CEO really ought to be a tool for the board, and be in its power.
My view is that the board has only one ultimate weapon, which is to hire and fire the CEO, who essentially manages the corporation. If you had to live with the current set-up, but the board had both the power to approve the minister's choice, and to fire the CEO with a two-thirds majority, would you go along with that?
Mr. Motiuk: We think that those kinds of points could be negotiated. Again, we feel that the main control and accountability would lie in voluntary choice of a marketing agency. A board of directors along the lines of Bill C-4, I think, is not out of the question. This is not a make-or-break deal with us. We could have ten elected and five appointed.
We do feel that the CEO should be appointed by the board of directors. A possible format would be the election of ten members by producers, and the rest chosen jointly be the elected directors and the minister. The basic concept of how the board of directors is elected and structured is not that big an issue to us. We could live with those kinds of variations.
Senator Hays: I would like a further comment on the argument to delay the passage of Bill C-4, pending the report from the Estey commission. If, for instance, the bill were to come forward with dual marketing, would you still want it to be delayed? What are the reasons behind the request for delay, because I do not really understand them.
Mr. Motiuk: Grain transportation and marketing in Western Canada are really linked. It is very difficult to separate one from the other. The Wheat Board, by virtue of the allocation of grain cars, is currently very heavily involved in transportation of grain. The grain industry and the railroads are now unified in saying that this is evidence of the old SEO agreement, and that perhaps the Wheat Board should be backed out of car allocation, and limited to marketing grain.
These issues are all linked, and we do have this review before us on the transportation system, so perhaps it would be more prudent to see what Justice Estey comes up with before we proceed with amendments to the act. The amendments might then follow some of the recommendations, and then a whole package of transportation and marketing reform could be brought forward by the federal government.
Senator Hays: Can you give me an example of how the Estey report might bear on the board? I do not know that it is within his mandate to comment on dual marketing, which is the big issue for you. I hear you, but I am still not able to envisage how this might be so relevant that we should delay the passage of Bill C-4.
Mr. Motiuk: Once again, marketing and transportation cannot be separated one from the other. If Justice Estey comes out saying that perhaps more car allocation and transportation responsibility should go to the trade, to the industry, those changes could then be incorporated into Bill C-4. We have got this other review underway, and let us get it done right. Let us not do it by half measures.
Mr. Gil Balderston, Alberta Grain Commission: More than one group has recommended that the CWB take control of the grain at the port. If that were to happen, it would be a major change, one for which Bill C-4 is not equipped.
Senator Spivak: I do not quite get your point here, because the major problem is that there are not enough cars to put the grain in when it should be put in. That is one of the problems. The second problem is cost. In Manitoba the cost of shipping grain is now up by 39 per cent. How would the advent of port-selling help farmers in my province get their grain out at half decent cost and in time?
Mr. Motiuk: We are quickly moving into transportation here, which just goes to show how difficult it is to separate the two. It is, perhaps, over simplistic to say that the railroad cannot provide enough cars, because the railroad will tell you that the reason more not available is because their cars are still loaded in Vancouver. The terminals say, well, we cannot unload them in Vancouver, because we are full of the wrong grain. They are full of the wrong grain because the Wheat Board sent the wrong grain, and did not match the shift to the grain that they sent there, which is what happened in 1996.
You get the wrong grain going to the wrong place at the wrong time, managed by a central body that is not accountable. Nobody in the grain handling system is currently accountable. Why do you not have cars? Well, they do not have empties, because they are full. Why are they full? Because they were not unloaded. Why were not they unloaded? Because the terminals are full, because the vessel did not come; it goes round and round.
The proposal that the SCO group is talking about would be very much like the marketing of, say, canola out of Vancouver. When is the last time you heard of a problem with rail car shortages for movement of canola, for canola exports, or of demurrage on vessels for canola? We do not hear such things. We do not hear them because the private trade is accountable; it costs them money if they have problems, so they make sure that their system works.
Let us look at a system like this for Wheat Board grain. Let the Wheat Board market, but let them take the grain at port. For example, if they need 25,000 tonnes of 1-CW-13-5 in Vancouver in the second half of May, they put out a tender. They put out a tender, and the grain companies then bid to get that grain to the coast. Somebody is then accountable.
The grain companies know that they will have the capacity to get that 25,000 tonnes of grain to the coast, and they will not bid on the contract until they have contacted the railroads and ensured that the capacity is there. The grain company will then enter into a contract with the railroad and the CWB, and knows what the cost will be if the 25, 000 tonnes of grain are not at the designated place at the designated time. How will that benefit farmers? The grain companies will compete for this bid. They will shave their handling fees, and they will seek transportation efficiencies like multiple car loadings and incentive rates, and shave their bases to get the business.
The Chairman: For your interest, in Torquay, Saskatchewan, 12 carloads of wheat sat loaded all last winter.
Senator Whelan: I just wanted to ask how your membership is made up, and how you are funded.
Mr. Motiuk: Our membership is made up of six farmers and three or four members from the Alberta Department of Agriculture. We are appointed by the Alberta government, and all of us are involved in other farm organizations. For example, I am a director with United Grain Growers, and Gil is a delegate to the Alberta Wheat Pool. One of our other members is a Wheat Board advisory committee member. Another member is chairman of the Alberta Canola Growers Commission.
As a body, we are brought together to advise the minister and the department on agricultural issues. We are appointed by the provincial government, much as senators are appointed. We are not appointed for life, however, and we do not have pensions, nor do we get paid if we do not show up for work.
Senator Whelan: We are counted absent for being out here. According to our situation in the Senate, we are absent.
Senator Stratton: We are here working. We do not know if we should not get paid, because we are marked absent.
Mr. Motiuk: I guess it comes down to your definition of work.
Senator Whelan: You are not appointed to the Senate for life; my term is only for three years. You are appointed only until you are 75, and I will be 75 next year.
Everybody keeps quoting the Ontario Wheat Board. Mitchell Sharp is a good friend of mine, but he is an old bureaucrat. Do not forget that. I was a founding director of that organization, and it was formed because of horrible and unfair marketing conditions. Farmers in Ontario are still going to have to follow the same procedure that you do in order to get a permit to export from the CWB. Further, the issue has not been decided yet.
Mr. Motiuk: It has been common practice for the Wheat Board to give export licenses to the Ontario marketing board cart without asking any questions. The Honourable Mitchell Sharp was a former bureaucrat, but he is also a close personal friend of the Prime Minister's and a mentor to him.
Senator Whelan: So am I.
Senator St. Germain: My main concern lies with the structure of the board of directors, and the appointment of the president. I really think that we have to move away from patronage appointments and partisanship.
Did you make a presentation to the House of Commons Committee?
Mr. Motiuk: Gil and I did not appear in Ottawa, although we had done a focus study.
As to the issue of partisanship and appointments, I know that Ted Alan, President of UGG, made reference to the appointment of the CEO of the Fresh Fish Marketing Corporation when he appeared before the committee last October. It was a partisan appointment, if you like, and that is exactly the sort of thing that we are afraid will happen in the appointment of the CEO of the CWB.
Senator Ghitter: Your summary of what has happened with canola made such good sense, especially because of deregulation and global trading. You have obviously made this plea continually over the last 30 or 40 years, so why have changes not been forthcoming?
Mr. Motiuk: In the last five years it is probably because Minister Goodale does not want to listen to his own surveys, not to his own marketing panel. In the previous government, it took a few years, but Mr. Mayor finally did open up a barley market.
Mr. Balderston: I have a document that I resurrected put out by the three Pools in 1972 that explains why it would be such a horrible thing for farmers to market canola through the open market. They are giving us the same reasons today.
My son is now contracting canola for next fall for $9 a bushel, and they are talking about $.70 a bushel for barley.
Senator Ghitter: I still do not understand. I still do not feel I have had an answer to the question.
Mr. Motiuk: I guess the question puzzles us too. There is a group of farmers who enjoy marketing through the CWB, and wish to continue to do so. We do not wish to take those rights from those people, and that is why we say that the CWB should be there for those who wish to use it.
The success story is evident in peas and canola. I suppose that this whole experience just essentially proves why government should not be involved in industry. It just takes so long for government to react to the realities of the world, and, if they choose not to react for political reasons, we do not get the right framework in which to run our business.
This is not a matter of if it will happen, but when it will happen. If the CWB refuses to change, it will soon find itself without feed barley to export, because farmers cannot grow feed barley for those prices. It puzzles us, too, because it just seems so obvious.
Senator Hays: Do you equate the CWB with the government?
Mr. Motiuk: Very much so.
The Chairman: Gentlemen, I thank you for appearing this morning.
Next we call Mr. John Prentice from the Canadian Cattlemen's Association.
Mr. John Prentice, Director, Canadian Cattlemen's Association: Thank you, Mr. Chairman, for this opportunity to speak to you today. I am a director of the Canadian Cattlemen's Association and a producer of livestock from near Edmonton. I sit on their Domestic Affairs Committee, and have been authorized on their behalf to present this brief.
I want to start by giving some background. As a generator of farm cash income, the beef industry is a dominant agricultural commodity on the Prairies. I believe we account for something like 22 per cent of net farm income.
The beef industry thrives not only on millions of acres of native pasture, but also on tame grasses and legumes. These tame forages are essential tools in rebuilding and maintaining soil fertility. As you know, with export subsidies and the wheat monoculture, our fertility has suffered. We feel that we would be a tool in rebuilding this.
The large and growing beef herd is easily the biggest single market for prairie-grown feed grains. Because feed grains are bulky, it makes sense to transform them into more condensed and valuable products such as meat. The Canadian beef industry currently exports 54 per cent of its production to a range of markets, but mainly to the United States, where 90 per cent of our exports go.
When the U.S. subjects the Canadian beef industry to 332 hearings -- we have had four of them now -- grain policy becomes a matter of investigation also, because that is a part of the cost of producing the beef.
We therefore feel we have a vital interest in ensuring an efficient grain production and marketing system based on open market principles. Normally we do not comment on grain matters, but we feel we have a stake here. My comments give some perspective.
When I was home in Scotland three or four years ago at Christmas, I leafed through the Scottish Almanac from about 1882. I noticed the cropping pattern in the County of Lanarkshire from 1855 to 1880: wheat production had gone down something like half, barley down 20 per cent, oats down 80 per cent and grasses considerably.
This was the situation that prevailed on the Prairies prior to the end of the Second World War. We had no assistance on which we could depend, no Crow benefit that was meaningful. There was no inflation. At that time the Prairies was the major producer of meat, eggs, and milk in Canada. At that time we produced 67 per cent of all the hogs in Canada.
In Alberta, and Saskatchewan also, you hear all about increased hog production. We are not even close -- well, we are close in Alberta, but not even remotely close in Saskatchewan -- to the hog production that we had 54 years ago. We no longer have the Crow, so all the jobs, economic activity, and the value of grain will return to the Prairies, but it says nothing about where.
The people from Manitoba and Saskatchewan know where, because the seaway pricing issue was addressed at that time, and we see lots of feedlots slated to go into Manitoba and Saskatchewan now. That is where the future lies. We are still building in Alberta, but I think we have reached the peak.
Now these are the concerns that we have. The proposed new Canadian Wheat Board Act really concerns Canadian beef producers. The present Canadian Wheat Board directors are appointed by government to act pro bono in the public good. In effect, this includes running a national feed grain policy through the maintenance of a minimum carry-out of around 2 million tonnes of barley at the end of each crop year. That is good in terms of looking after the domestic industry, the domestic users.
The proposal is that the majority of the future board of directors be elected by and accountable to grain producers. This new board would be given tools that would enable it to be more market responsive. To have the flexibility to procure grain, it would be endowed with the power to raise the initial price and terminate a pool literally overnight.
It would also be allowed to contract a price with a producer even before the seed is in the ground. This so-called need has not been demonstrated, as contracting can be readily done today either directly on the futures market or with a counter-party, who in turn would probably use the futures market, and this is being done quite extensively now.
Our real concern is the proposal to give the Canadian Wheat Board the power to buy on the open market backed up by a contingency fund to cover any losses that might result. In a sense, when a grain producer decides today whether to sell on the open market or to the Canadian Wheat Board, he is choosing between dual markets. In this scenario, the price on the open market is determined through the interplay of the forces of demand from users and supply from producers who have the option of selling to the Canadian Wheat Board.
Their perception of the Canadian Wheat Board payments, their timing, and the prospects per quarter act as a floor on the open market price. If this sensitive producer-determined balance of supply and demand is overridden by the Canadian Wheat Board buying on the open market, the effect would be to reduce the supply and drive the price up. One can easily imagine a scenario where a combination of tight carry-outs, low acreage, and adverse crop conditions, together with a growth and demand from value-adding industries like cattle feeding, would result in a shortfall of grain.
In such a situation, or even where grain was not tight, where it was quite plentiful, it would be easy for a future board to ingratiate itself to its electorate by using its contingency fund to artificially drive up the open market price. The principal victims of this abuse of power would be the livestock producers, who are the greatest users.
In conclusion, Bill C-4 sets up a situation where the proposed Board would have the motive, the tools, and the opportunity to cause damage to industries which add value to grain on the Prairies. Remove the opportunity. Keep the Canadian Wheat Board and the open market system separate. The Canadian Cattlemen's Association strongly recommends that the power to buy cash grain on the open market not be given to the Canadian Wheat Board.
Incidentally, on October 15 last year, the Saskatchewan Wheat Pool leadership met with cabinet ministers in Ottawa, and those were the exact same points that they made, so it is not just us.
I put this table in here. I do not know if you are interested in just taking a glance at it. If you look at acreage in 1994, 10.7 million acres, and a yield of 53.1, you get a production of 11,690,000 tonnes. Now, you combine that with a carry-out of, say, around 1 3/4 million tonnes, such as occurred the following two years, that year and the following year, and you come up with a supply of around 13,440,000 tonnes.
Now, in today's scenario where you have a feed, waste, and dockage using 10.3 million tonnes, you have food and industrial using 400 million tonnes, and incidentally, we are going to have a plant built in Fort Saskatchewan this year that will use 650,000 tonnes, you are left with 1 3/4 quarter million tonnes.
Now, the crop year ends on the end of July, yet the crop generally does not come off until a month and a half later. Who will use that 1 3/4 million tonnes? That accounts for no exports at all, and the picture that I am trying to create here is that we do not have a hell of a lot of feed grain on the Prairies anymore, and the Canadian Wheat Board's chief export is actually malt barley, so we are in a potentially pretty tight situation.
Now, we can handle economics, but we cannot handle politics, so please remove the opportunity for that to occur.
Senator Ghitter: I found your argument somewhat remarkable in this sense. I have always regarded the cattlemen as being great free traders and wanting to be in global markets. I have heard those arguments during my years in Alberta, but if I am reading you right, you do not want the grain producers to have that same opportunity. You do not want them to have the opportunity to share in the betterment of their price and product. You want to depress their prices so that you can take the advantage of it and add value to your product, but you do not want them to get value.
Am I misreading what you are saying, or is that what I am hearing?
Mr. Prentice: You have us figured. We operate in an open market. You know we are losing money and are not too happy about it, but we stomach it right now, and what we would like is an open market for grain too.
Now, how the grain producers handle their own internal dynamics is one thing. Maybe they want a Canadian Wheat Board, but just keep the two systems separate. In other words, when the person who produces the grain wants to patronize the Wheat Board, that is fine. Let him do that. When he wants to patronize the open market, let him do that. But do not have the two commingle and do not allow a situation where the Canadian Wheat Board can come in and override his decision and take grain off the open market and artificially drive the price up with its contingency fund. That is all we are saying. Just keep it open.
Senator Hays: Mine is a similar question to Senator Ghitter's, Mr. Chairman. I am not sure what you want us to do. A contingency fund would backstop or support cash trading, and that would see the Wheat Board perhaps evolve into another grain company. It is natural that the pools do not like that, because they are grain companies, and they do not want a competitor.
The cattle industry may be saying the same thing, but if you are a grain producer, another buyer or marketer in grain is a good thing. So what do you want? I am not quite sure what we could do to please you.
Mr. Prentice: The point I was trying to make is the governance is changing from acting pro bono to being elected and accountable to producers. They are being given the tool, the club, to do a better job.
Senator Hays: They are being given the tool to do a better job for grain farmers, in your theory. Some people say not, but --
Mr. Prentice: Actually, I want to go back and address a question that was asked of Rod Scarlett earlier on this morning. He was asked about this cash trading, and he made a comment that it could open up rifts within the industry.
In 1995, the United States had a very serious crop failure, with a late spring, late seeding, frost, drought, fungus, corn borers, and wind, and the whole works. They came up drastically short.
Senator Hays: It was like biblical locusts.
Mr. Prentice: It was the equivalent. Now, on November 15, 1995, the Canadian Wheat Board pleaded with farmers. They had the opportunity to sell to Japan and net back $4.43 a bushel. At that time the Lacombe, Alberta, local market was $3.35, so they could have generated a $1.08 more.
Now they could have taken advantage of that with this new Bill C-4, for they would have had the ability to truncate pools and raise initials overnight. They could have given a one-month window, or whatever, and could have exported it.
They do not have to go into the cash market and buy grain, but if they had that power, they would have literally depleted our inventory.
Now, if you take this crop year to the end, the United States basically ran out of corn. They were bringing corn back up the Mississippi. They were feeding wheat, and they darn near ran out.
We had a carryover, if you look here, of 1.8 million tonnes. That is three days of supply in the United States, and if they would have shipped to Japan, they could not have taken advantage of that. They could not anyway, because of their de facto feed grain policy of a 2 million tonne carryout. If I were a grain farmer, I would have been really mad about that situation, because I would not have been able to take advantage of it.
I think the board has the tools with the truncated pools and the barley raise, and that is why they need the contingency fund. However, if you combine the contingency fund with the cash market, and you have an environment where power could be abused.
Senator Hays: I understand your position.
Senator Whelan: I am a little bit deaf, but I thought I heard you say you are making a lot of money out of beef.
Mr. Prentice: I think you know better than that. Beef is one of your four-letter words, Mr. Whelan.
Senator Whelan: Yesterday we heard a witness at the hearings in Calgary say that those beef farmers should not have any say at all in the price of grain, and you are disagreeing.
Mr. Prentice: I equate this to a steel company having no policy on iron ore. I mean, if there was no iron ore, there would be no steel. If there was no feed grain, you would not have good beef. You would have Australian grass-fed beef, and I am sure you have eaten that.
Senator Whelan: I am sure you know that I am aware that the largest feed grain market is in Canada, not in some export market. We see these big figures that they are going to triple the hog production in Alberta, and double the cattle production. At the same time, I read in the paper they are going to establish new environmental laws for pollution. Have you any comment on that?
Mr. Prentice: There is no doubt that environmental concerns are acting as a ceiling. Quite a few of the American states have put moratoriums on further development, as has the county of Lethbridge in Alberta. We are going to have to spread it out more, and I question, also, some of those dreams. Doubling the feed-fed cattle output in Alberta is a non-starter, because Saskatchewan and Manitoba, our traditional source of calves, are going to finish more of them. Where are we going to get the calves? There is a limit.
Senator Whelan: If you had that many, where would you sell them?
Mr. Prentice: There would be no problem selling them --
Senator Whelan: Not if you give them away.
Mr. Prentice: No, I think we could make good money selling them.
Senator Whelan: We read a lot about oil prices, and just lately I read that the oil countries or producers are all joining up to raise the price of oil. Would you like to see something like that in grain or cattle?
Mr. Prentice: I think that is probably a grey matter that I swore I would not comment on.
Senator Whelan: You are scared to comment on it.
Mr. Prentice: No.
Senator Whelan: They are trying to manage supply so they can raise the price. Senator St. Germain was an old poultry farmer, and now he is a senator, but he knows that poultry farmers always get a decent return. The millers and everybody else who supplied them always got paid. The whole economic structure was very good. But when any other group of farmers try to do that, for instance, you get a big editorial in The Globe and Mail calling farmers ripper-offers, but nobody says anything about the OPEC nations.
Mr. Prentice: The only comment I would make is that agriculture is a dynamic industry. It is always in a state of flux. When the Crow was taken away, everybody said, look at the cost of shipping a tonne of grain. No one will grow barley anymore. They got it all wrong. We condense into the form of beef, and we send it out that way, so I personally do not feel that beef has to take a back seat in any new environment. We will compete against canola, which is pretty high value and condensed, and wheat, because beef is even more condensed, more high value.
Senator Whelan: I found that when it comes to marketing, the beef farmers were the closest thing to Santa Claus. They could still make a living and give it away.
Mr. Prentice: Yes, they are.
Senator Spivak: I have just a short question on your comment on the supply. I asked this question yesterday and was told there was no problem. Do you see a problem with the huge increase, if there will be a huge increase, in the supply of feed grains to cattle and hogs? Do you think that will be a delicate balance, or is it going to be easy to achieve?
Mr. Prentice: I think any of the leadership that is a little more clairvoyant can see potential problems down the road. I am not saying it will happen next year or the year after, but probably some year over the next ten we will have a low acreage, a drought, some disease or an early frost. Then we could have a tremendous problem.
Even today there is not a hell of a lot of grain to sell. Even if the Saudis are not buying, that is one thing, but if they are buying, where do they get it? They have to go to the U.S. or Eastern Europe now, which is in surplus and coming back into its own. I do not think we have grain to spare, quite honestly.
Senator St. Germain: I have one very short, brief question. You want to remove the opportunity of a dual system. Can a total grower-represented board satisfy you?
Mr. Prentice: That is a loaded question.
Senator St. Germain: Senator Whelan always characterizes me as a chicken farmer, which I was, and I ended up being a beef grower. They had to appoint me to the Senate because I could not survive. I do not want to lose the rest of the beef farmers in the country.
Mr. Prentice: We have grown comfortable with the Canadian Wheat Board as it is presently structured, and the appointed people. They have the greater public good in mind when they set policy, when they have this minimum carryout. It has been good for us, although we take exception to the accusations from the United States that the Canadian Wheat Board always benefits the feeder. I have studied that back for 25 years, and most years, we actually pay more for grain.
You give a board that is accountable to producers and elected by them all these tools, and, boy, they do not look at that greater public good. It scares us a little bit. Rather than give them the tools they could use to abuse us, keep it open so that economics can dictate whether grain goes. I think we will have a better next quarter every day, but we do not always. But we would be more comfortable with that.
Senator St. Germain: If you listen to their argument, the Wheat Board virtually has been giving the product away, so the beef growers, from their perspective, or whoever the end buyer is has been benefiting under the present system. We are hearing from many witnesses that the Wheat Board is not working for them under the present system. It is basically not a seller; but a buyer.
Mr. Prentice: Let us look at who buys the most Prairie feed grain. The Canadian Wheat Board buys very little. I believe that at 2 million tonnes out of about 15, about 15 per cent goes to the Canadian Wheat Board now in a normal year. Maybe some years it gets a little bit more, but we get the vast bulk of it. We are not getting it by being Santa Claus, like Senator Whelan says. We get it by outbidding the Canadian Wheat Board. The argument that the Wheat Board is not a seller but a buyer does not hold any water.
Senator St. Germain: I am not going to debate you. I think I understand it fully, but --
Mr. Prentice: Are we finished now, because the message I am trying to deliver, the one single only message is, remove the power to buy and the cash market from the Canadian Wheat Board and Bill C-4. That is all we are asking.
The Chairman: Do you represent the Cattlemen's Association of Canada, or of Alberta?
Mr. Prentice: Canada. We are a confederation of every single provincial producer group, commission, stock growers group or whatever.
Senator Whelan: Maybe I did not interpret right, but I get the gist of what you are saying. You are scared of this cash buying because it might cost you more money for your grain for cattle.
Mr. Prentice: That is not the concern. It is a concern that could arise through an abuse of power. If it arises because of economic circumstances, that is one thing. But to give someone the tool and the power to abuse you and a motive, that is what scares us. If we did not have the power to buy in cash, there would be no problem.
Senator Whelan: You do not have much of a choice as to where you sell your beef, either? Your choices become fewer every day, do they not?
Mr. Prentice: We have at least seven or eight choices at least. We have four major plants in Alberta and several in the States.
The Chairman: I have a couple of questions. Are many of the feedlot operators members of the Cattlemen's Association, or are your members mostly cow producers?
Mr. Prentice: Let us take Alberta as an instance where we produce two-thirds of the fed cattle. Every animal in Alberta pays a levy, so cow/calve people pay a levy, feedlots pay a levy, and they are all represented on the delegate structure and the board of directors of the Cattle Commission.
The Chairman: As for the Crow rate change, you indicated that the feeding industry could move from Alberta to Saskatchewan. Now, that would be a miracle.
Mr. Prentice: No, it is happening.
The Chairman: I have been telling people that, but nobody wants to listen to me, coming from Saskatchewan.
For the last ten years, though, I personally have fed cattle in Alberta. I am feeding cattle at Lethbridge right now. The difference in the cost of barley is very, very significant. What are your numbers on the rate of gain across Canada? Would you dare give me that number?
Mr. Prentice: I do not have that number, although I have been asking that question. The same argument applies to choosing between southern and northern Alberta and the eastern and western Prairies. Is it colder in Winnipeg? I think it is, but how much cheaper do you have to get your grain to compensate?
I used to believe it was more efficient to feed in southern Alberta, because I got better performance. I changed the two lots that I was in, and found other lots. There is no difference. I think a lot of that boils down to management and to expertise. We have the expertise in Alberta. If they can hire the expertise and build the lots in Saskatchewan and Manitoba, I am sure they will be successful.
The Chairman: The indications from some people that analyse the situation are that cattle prices next fall will rise significantly because there will not be enough calves to go around for all the people who are going into the feedlot industry. Do you agree with that?
Mr. Prentice: This has been the problem. In this futures market every contract is 2 cents higher than the previous one. Everybody hopes that the market will get better and are therefore placing an awful pile of calves on feed. They are all trying to get this good price.
You are well aware that the result of that is we are going to lose $100, $200 on everything that has been going for the last few months. But by the same token, people are getting sick of this. Since November, there have been a significant number of placements five months in a row. Obviously there is a hole coming, but when? We have been trying to fill this hole up. I think it will come this summer, and I think next fall when we get into the retention of breeding stock. Then we will really have short numbers, yes.
The Chairman: Will that not increase the price of barley?
Mr. Prentice: No, there will be fewer cattle on feed; they will eat less. Actually, what will drive the price of barley up next year is El Ni<#00F1>o. It will be a lot colder.
The Chairman: I thank you for appearing this morning.
I call the Canola Alberta Producers Commission. Mr. Brian Trueblood.
Mr. Brian Trueblood, Director, Canola Alberta Producers Commission: I am a farmer at Dapp and involved in several organizations. I am now a director for the Alberta Canola Producers Commission. I was a delegate for the Wheat Pool for six years. I produce wheat, barley, canola, peas, specialty crops and products, and as a canola commission, we have a bit of a problem. We try to confine our views on strictly canola and related matters. Bill C-4 affects the canola industry, although it is primarily a wheat and barley bill, so I will try to confine my comments. When I talk about canola, I will be talking as a canola director, and when I am talking about wheat and barley, I would like to talk just as a general grain producer from Dapp.
I wish to make three points. First, I would like to point out the need to remove the inclusion clause, and to remove canola from the definition of grain under the Canadian Wheat Board Act. Second, I would like to stress the need to delay the passage of the bill until we hear from former Justice Estey. Third, I would like to note that the Western Grain Marketing Panel recommendations were not followed.
As a canola industry, I think we are fairly united about the inclusion clause. The feeling is that there has been no demand for the inclusion clause to be in there, for canola to be under the Wheat Board. From my area, I can honestly say as a director for only two years, no one has come up to me and asked me to please work to get canola under the Wheat Board. It has not been a concern.
Another point is our customers are telling us that they would prefer not to deal with the Wheat Board. I am talking about the Japanese in particular. They have come out and said that this is not their preference. Having this clause would send the wrong message to our customers.
There is also a concern with our U.S. trading partners. I just want to note that the value of canola products to the U.S. in, I believe this was 1996, was 716 million versus wheat for 446 million. There are enough trade irritants already with the U.S. in the canola industry. We do not want to give them something else to worry about.
We are just beginning to see some of the possibilities as far as specialty canolas and products from high erucic acid canolas to linoleic acid. They tell us the possibilities for specialty oils out there are unlimited. I think these are best produced under a contract between the grower and the buyer of that oil.
Another concern is what would happen to canola producers in eastern Canada? There are some in Ontario and Quebec and even, I think, as far east as New Brunswick. Would they have to work under this legislation? That is an uncertainty. The Ontario Canola Growers' Association said they are opposed as well to having canola under the Canadian Wheat Board.
There is bound to be continued trade pressure against the Canadian Wheat Board in the next rounds of world talk. I think the canola industry, again, is united that we would probably benefit from not being involved in this debate.
Second, currently Mr. Justice Estey is reviewing the transportation system for grain and agricultural products. The Canadian Wheat Board plays a major role in this system, and it would be prudent, I think, to wait for his findings. He may well find there is a need to change the role of the Canadian Wheat Board in grain handling and transportation, and that may have to be enacted in legislation. To hear what he has to say, I think, would only be prudent.
As for my third point, the Western Grain Marketing Panel took considerable time and effort to collect opinions from across Canada on this issue. Many of us put time and effort to make presentations and comments to panel members. Bill C-4 did not seem to take into account many of the recommendations in this report. In my opinion, I think that is one of the reasons that we have run into such trouble on Bill C-4. We all put a lot of effort into the Grain Marketing Panel. It came back with the unanimous recommendation. The minister picked the panel members, and then Bill C-4 did not really seem to follow the recommendations of that panel. In my opinion, that is certainly causing a lot of the confusion in the industry today.
Finally, for my part, I am not wholly opposed to the Canadian Wheat Board. It is believed to have done a good job in developing markets and in dealing with many of our customers. I think through the CIGI program, through its directors across the world or through its outlets across the world, it has done a good job in developing and keeping our markets and in promoting Canadian grain. However, just as Canada is diverse, so are the farmers of Western Canada, and we need more flexibility in how we market our grains.
I believe that Bill C-4 needs to be discarded and a new act put into place. The new act must reflect the government's intention to work with farmers and industry. This act would do everything possible to make Canadian farmers competitive in a world trading environment.
There are opportunities out there for countries that have the ability to supply customers with what they want, when they want it, at a competitive price. The new act should facilitate that as best as possible.
Senator Hays: On the inclusion clause, you are aware of a proposal that would see the act amended to delete the reference to inclusion or exclusion. But to me, I suppose that there is still a possibility, even if there is no reference, of canola producers saying that they want to market through the board. Even if the references to canola and rapeseed in the definition of grain were deleted, there is still that possibility. How serious a problem is it for canola producers that that could happen?
It must be very serious, because we have heard you and others raise it. I am wondering, however, why the Japanese say they are so upset about the possibility of dealing with the Canadian Wheat Board. I cannot imagine canola being a board crop unless pretty much everybody wanted it. At least it is a possibility, whether it is referred to in Bill C-4 or not.
Mr. Trueblood: I think the message we want to send out there clearly to our customers is that this is not going to happen. If canola is under the Act as a possibility for inclusion, our customers worry. They would sooner deal on an open market because, I think, they can protect the risk. They have a better risk management system under the open market. They can go, and throughout the year they can put off their risk in the futures market.
They have a better idea where they are going to be. They can go way out ahead and lock in their prices if that is what they want to do, and they can find people that are willing to sell at those prices.
You asked if there was concern about the possibility that in the future canola would be under the Wheat Board? I think right now there is no possibility. If the Wheat Board were totally revamped and canola farmers demanded it, then that is what the case will be, as you say. But I think right now we would be sending the wrong message. We would like to keep canola totally clear of the debate, and I think that would help our industry.
Senator Fairbairn: My question becomes supplementary to that of Senator Hays. He pointed out there could be a possibility that canola or other grains could be added, without even the protection of a producer vote.
We have heard, clearly and consistently throughout our hearing, that there is no pressure from anyone in the canola business to change. Even with Bill C-4, it would not be an issue. What you are really saying is that it is almost a psychological issue, that it concerns you that even an unlikely prospect could be raised in some people's minds, with or without Bill C-4.
Mr. Trueblood: Right. We are going into a new round of world trade negotiations. We do not want canola associated with the Canadian Wheat Board issue. We would like to keep that totally separate. There are other concerns about the act. Who can call for a vote? How does it all happen? I think we would just like to stay as far away from that debate as we possibly can. That is the sense that I get from the canola industry, and that is the sense I get from the farmers in my area.
Senator Ghitter: Is there more than one canola association in Canada? Are there a number of you?
Mr. Trueblood: Certainly. In Alberta we have the Alberta Canola Producers' Commission, which is really, as far as I know, the only canola organization in the province. There are 12 elected directors from across the province. We have a 50-cent a tonne check-off that we use to do market development research work and deal with our members and administrate our organization.
In Saskatchewan there are two organizations. There is the growers and the development commission. The growers is an association with a paid membership, and the development commission has a check-off.
In Manitoba, they have just formed a commission. There are many provincial organizations, and then across the provinces there is the Canadian Canola Growers' Association, which is run from the provincial organizations.
Senator Ghitter: Are you then concerned under the section relating to extension as to who the association is? It says that a written request may be sent to the minister by an association whose members are all producers. You could have some canola producers in, some out across the country. Does that concern you?
Mr. Trueblood: That is certainly a concern of ours.
Senator Ghitter: There would be no consistency across the country.
Mr. Trueblood: Right. As far as I know, Bill C-4 does not spell out who can call for that.
Senator Ghitter: Would you prefer it if the bill did spell it out, or is that possible?
Mr. Trueblood: In the canola industry, it might be possible, but I am not sure it is possible in all the industries. There are many other general farm organizations. There are a lot of organizations out there, and they all have bits and pieces. The industry is all interrelated, so it is not a clear thing in my mind, or it is not a clear thing in the Act. I think it would be a tough thing to spell out who could call for a plebiscite.
Senator Ghitter: Does this legislation, then, tend to fragment your industry and other industries because you will not be speaking as one voice?. You could be fragmented across the country.
Mr. Trueblood: I certainly think that is a possibility.
Senator Ghitter: Is that positive or negative?
Mr. Trueblood: I think it would be negative to have those debates in the industry. It would not do anything to help the industry. I believe those debates certainly always cause friction in the communities and hurt our reputation.
Senator Ghitter: Would it make more sense if all recognised associations voted at the same time? Then the majority would apply to everyone and you would have one decision, rather than this fragmentation that is implicit in this legislation?
Mr. Trueblood: What is a recognized association? Who recognizes them?
Senator Ghitter: I guess the government. That is what they say comes later in the regulations.
Mr. Trueblood: I think we are opening a can of worms there, because what is to say another organization could not start up and say, we are the Association of Canola Growers from Dapp, and we have a particular view on something, and we are only three people.
Senator Ghitter: It sounds to me like this whole section is imperfect, to say the least.
Mr. Trueblood: I think imperfect would describe it well.
Senator Whelan: I would like to comment that I think the Japanese customers sound like they come from the Cattlemen's Association. They are looking for cheaper canola.
I was not in charge when the Wheat Board sold canola, but I remember the Japanese ambassador came to see me and said, "You guys honour your agreement, you honourable people." I told him that of course we would honour our agreement, because I had talked to some of the other ministers. But when cheaper rapeseed became available in France, where do you think my honourable friend went to? He did not stay with Canada. He went and bought in France. So I am a little bit suspicious when they object to somebody having some say about what is going on.
When you say on your last page:
I believe that Bill C-4 needs to be discarded and a new act put in place with the intention of government working with farmers and industry. This act would do everything possible in order to make Canadian farmers competitive in the world trading environment that we live in.
I keep watching what is happening in our big global situation with the huge consolidated companies getting bigger. I do not call it global. I call it gobbling. They are gobbling up their competition, so you have less opportunity to sell worldwide than the five or so companies that control 86 per cent of the world food trade. I think you need something strong, and you would not be scared of an inclusive and exclusive clause that was held by a democratic vote of producers, would you?
Mr. Trueblood: Certainly not right now. We object to the inclusion clause only because of the message that it sends out to our customers. The Japanese are our customers and they buy a lot of our grain. I should have the numbers on the tip of my tongue, but I do not. I think the less we can do to create animosity with our customers, the better off we are. It is not going to happen, so let us just remove it from the act and not talk about it.
Senator Whelan: They are our second largest customer for agriculture products.
Mr. Trueblood: Right. Correct.
Senator Whelan: We see the anti-combines legislation in both the United States and Canada being stepped up. There may be recommendations for some really solid changes because of these takeovers, which just seem to be unstoppable in many instances. Nobody seems to be doing very much about it. I have deep concern about that.
Mr. Trueblood: It certainly is a concern of mine; although, you have to also look at the canola industry, which has prospered without the Canadian Wheat Board. I think I am becoming less scared of those companies than I used to be. Maybe it is because we have to deal with them more that I am becoming more comfortable with them. I am just speaking from my personal point of view. We see what is happening with the pools, and I think, as long as there are the five companies out there, we are all right, but if there are less, it is a problem.
I think the Wheat Board still has a role to play as a watchdog. It can also help differentiate Canadian products from other countries' products. I think it really has an opportunity to do some good work there. It has done some good work there, as has the Canadian government. I am not sure that all the farmers of Western Canada are aware of it. I am not saying that we have to do away with it. I am just saying let us find the best way to work with the world realities that are out there right now.
Senator Whelan: When you talk about canola, and we go back to rapeseed, you mentioned the wonderful work done by the Canadian Department of Agriculture in conjunction with universities, mainly in Saskatchewan and Manitoba. That work made this industry great. I spent one of my first days as your minister in 1973 with Dr. Donne in his Saskatoon fields on a Sunday. I saw all his pots and his lab. He had been working with canola or rapeseed since he was 17 years of age.
So our scientists did a lot. Even when you bowed to the east, you bowed to the researchers. I am a strong believer in research. I am concerned now when you see Monsanto and his big companies on joint ventures, because there are too many strings tied to this. You need independent research by independent scientists that are not afraid to tell you what they want and what they are doing. We find it more and more difficult to get a straight answer.
Mr. Trueblood: That is true.
Senator Fairbairn: I have a really quick question. You mentioned that Japan was concerned at the merest hint that something might happen. If this were an issue, what would be an alternate source for Japan if it decided not to go with our canola?
Mr. Trueblood: I think that is a particularly interesting question. The markets are growing in Australia and Argentina. We have had some supply problems, because of the rail problems, weather problems and whatnot, and labour problems, and Japan has turned more and more to Argentina and Australia to grow these products for them.
Mr. Trueblood: Other customers are out there.
The Chairman: The oil seed crops like canary, flax, canola, have been known among the farmers as cash crops. They have been significantly high. Flax, I think, hit $11 here a week or two ago and because of those big contracts it is $9 and up to $10, $11. We know what canary seed has done on and off. Is there fear among the canola producers of losing this cash crop into the pool because of the inclusion clause?
Mr. Trueblood: I believe that is exactly what the concern is: that they would lose their opportunity to manage their own risk.
The Chairman: How significant has this cash been to the farmers?
Mr. Trueblood: It has been very significant, particularly with the way the Wheat Board is structured. We have to wait for a year and a half possibly for some of our money. It is very important to get that cash out as soon as possible; although, again, I will put in a plug for the cash advance program.
Senator Robichaud: Mr. Trueblood, do you understand French?
Mr. Trueblood: No, I am sorry. Je suis desolé.
Senator Robichaud: In the interest of time, what would you say if there was a vote to consider canola on a dual marketing basis by the Canadian Wheat Board? What would you say to that?
Mr. Trueblood: Currently, I would say that the answer would be no. I think if that is ever to happen, the Wheat Board has to show some leadership to get out there and do a proper job and show a definite benefit to the producers. Right now for the same reasons, we do not want the inclusion clause in there. I think the farmers in Western Canada are quite content to leave it the way it is.
Senator Whelan: The cash crop for farmers was fair. I will make a comparison. Cash crop to farmers is the same as canola is to a bee in making honey, only the farmers make money. That has been a bonanza to the honey industry. In the far north where there are so many more hours of sunlight, a bee up there can make as much as about 240 pounds in a short season in one hive. So that is a tremendous industry, and it is a side industry to the canola industry, too.
The Chairman: Thank you for appearing.
The committee to this point has heard 73 individual farmers and 24 organizations. We have tried to accommodate as many individual farmers as we possibly could in these hearings. I will now call a group of individual farmers. David Comfort, Douglas Livingstone, Bill Blake, and Thomas Jackson.
Will you identify yourselves, state where you farm and the kind of farm that you have? We will have a five-minute presentation from each of you and then go to questions. I only see three of you, so we can probably push that to seven minutes each.
Mr. David Comfort, Farmer: I farm a very small farm southwest of Edmonton. I am also a crop and agricultural consultant, and I deal with between 10,000 and 20,000 acres worth of farming in the central part of Alberta.
Mr. Douglas Livingstone, Farmer: I farm east of Edmonton about a hundred miles from here. I have a small cow/calf operation and a small grain farm. I produce a little bit of seed. I am representing myself today.
Mr. Thomas Jackson, Farmer: I am a fourth-generation farmer who farms just east of Edmonton. We homesteaded in 1883 in that area. We farm about 4,000 acres, most of which is grain, and I am appearing as a concerned citizen about what is happening with the Canadian government and our grain.
The Chairman: We will begin with Mr. Comfort.
Mr. David Comfort: I am here on my own behalf. I have been struggling with Bill C-4 for quite a while -- to the point of almost saying to heck with the whole works and not showing up to talk to you today. I was quite disgusted and discouraged. However, that pushed me into reading up on what this was all about. As a result, I have penned a couple of pages of information for everyone here to think about.
At the outset, I must say that I neither fully understand the implications of the political reasons Canadian politicians introduced bill; nor do I understand the degree of importance my government must attach to its enaction that it saw fit to force its passage through Parliament by invoking closure. I do know that today might be considered by some to be a fitting day, that being April Fool's Day, for a presentation such as mine, but I would caution everyone present that the time of my presentation, that is the 11th hour, might have significance from both a political and personal viewpoint.
This bill is a reminder of how little our political system has ventured in relation to its historical events and debates on agriculture. I am specifically thinking of the Corn Laws and their repeal in 1846 in England. As I am sure you are aware, these laws concerned the placement of protective tariffs on grain imports into England and benefited the landed gentry, which was the Tory party at the time, while raising the price of bread steeply for the workers in England. Riots ensued. The famine in Ireland during the 1840s and the industry-supported Anti-Corn Law League were instrumental in repealing the laws, and resulted in a split of the government with the "Conservative Tory," Benjamin Disraeli, on one side, and the "Liberal Conservative," William Gladstone, on the other.It was Disraeli who brought down Peel's government in 1846.
This little jaunt into history is necessary to stimulate your interest in this era. This is also the time of Karl Marx, Malthus, and other great economic thinkers. It is also necessary to direct our thinking towards a useful discussion about how very vital agricultural laws are to the existence of the social fabric of our country.
Experts in macro and micro economics have published many articles on agriculture laws, and I would recommend that all present would do well to revisit these writers.
It appears to me that, politically, the Government of Canada is continuing a cheap food policy which protects labour and government expenditures to the poor and unemployed. At a time when some of our natural food resources are failing, for example, the fisheries, it is very important for the Government of Canada to tighten up by exercising more control over the land-based food stocks by controlling the price of exports by reducing competitive signals.
Further, to maintain the high cost of doing business in the grain sector by maintaining a very expensive handling and cleaning system, and allowing the export of deer manure to continue, results in a tax on the farmers and suppression of agricultural production. I am sure it increases hopelessness, illness, and cheap labour throughout the food sector. It keeps inflation down while maintaining an available labour force of 9 per cent to 10 per cent.
What Bill C-4 does for the Government of Canada it also does for the large multinational companies.
With the devaluation of the Canadian dollar in relation to the American dollar, prime agricultural production, Agchem dealerships, and land are relatively cheap propositions. Large movements of European currencies are also occurring, specifically from Holland, Denmark, Germany, Switzerland, and France.
Why would anybody who is exploitative or profit-driven not invest in a country like Canada? Why would any Canadian landowner continue to engage in land-based agriculture when he can sell for big bucks while the government allows the sell off, gaining a large tax base and foreign investment dollars?
If the farmer is allowed independent access to his own production in either whole or in part, the Canadian government would be hard pressed to enforce political design. It would create wealth for individual producers who, in turn, would disrupt the political landscape. Keeping the landowners poor keeps them busy, keeps the supply of money in Canada, protects the labour pools, and protects business from high labour costs.
I believe complete control of all agriculture production is not healthy for individual producers. It is not healthy for the any individual working in Canada. I request the repeal of Bill C-4. We need direction from our politicians, not total oppression. Canada needs risk takers. Risk takers are an important aspect of growth and change, and they usually do so within the confines of the social fabric of society.
Elimination of the total human spirit breeds mistrust and, historically, has led to riots and revolutions. The idea of the hopelessness of Canadian agri businessmen or business women disturbs me, and I would at this time ask that the following prayer be offered for all those in authority, that they might ask for an understanding of the Creator's design for all people of this dominion, and that we come to a reassessment of our role when we come face to face with our Creator in the quiet time of our lives.
Thank you again for allowing me the opportunity to make this presentation, and, hopefully, for the recognition that I will be able to attribute to this prayer at the end.
The prayer goes as follows: Search us, O God, and know our hearts today. Try us and see if there are some wicked ways in us. Speak to us so that every mind and intent be known and set us free. Guide and bless these men and women who have been sent here by the idea of a better Canada, who have been conceived and directed by you to govern this great country. Grant them the wisdom to govern and make decisions which direct Canadians to your living, loving will. Amen.
That ends my presentation.
The Chairman: Mr. Livingstone, would you please proceed?
Mr. Doug Livingstone: Thank you for the opportunity to meet with you today. I will not read my brief so that we will have time for questions, but I will highlight a few points. I hope you will read it when you have a little more time.
I have made a point of staying out of this debate until today, not because I am unconcerned and not interested, but simply because of my history. I am not a large user of the Canadian Wheat Board system, although I believe strongly in it. I do use it.
Unlike some critics of the Wheat Board, I do not necessarily produce non-board crops because they do not come under the board. My production of those crops is a management decision. However, I realize that a lot of people use that as a crutch. They grow peas because it puts nitrogen back in the land. They grow canola, because it is a good cash crop. They grow other crops, because that fits into chemical rotations and not necessarily because the Canadian Wheat Board does not serve them well.
Having said that, and having listened to the critics of the board system, I begin to wonder whether or not this is indeed a time for individualism.
If I might digress for a moment, with regard to the livestock part of my business I am watching something very interesting happen. I would suggest that, within the next five years or even sooner -- and it has been stated by the USDA -- less than 2,000 feedlots will control 90 per cent of the cattle in the U.S.
Canada will be no different. We can see the consolidation of packing businesses, of feed producers, and of cow-calf producers and we can recognize that the individual producer will disappear. We need a very different way of meeting this challenge.
I would suggest that the same thing will happen in the grain industry. It already is happening. We are contracting crops, and we are contracting sales. Fewer players will be involved in the business of buying our grain, and in marketing our grain. We will lose customers who have easy access to other customer bases if we do not provide quality service and things other than a product.
There are certain things that the Canadian Wheat Board does for us, as an organization, at a rather low cost compared to what it might cost me as an individual, and they do it with less risk to me as an individual, because of the size and scale of their operation. For example, they can borrow money much easier than any individual. As well, they offer opportunities to contract new crops and market them, which no individual and hardly any companies will allow you to do, because they will find a market for it. The board will test it and bring customers in to show them how it can be used. Those services are currently provided by the organization, and they are essential to my business. We cannot ignore that as we tend to criticize this organization that has occasionally taken a bad rap.
Turning to the bill, I would suggest that, in view of all the criticism that has been levelled at the Canadian Wheat Board as it is now, it is time for a change. I would also suggest that Bill C-4 allows the flexibility for the producers, finally, to have what they have been asking for, namely, accountability and the opportunity to run their own business. They have also asked for some support from government. They do not want the government completely out of it, specifically when it comes to guarantees of loans. I have no problem if some directors on the board are from the government, because anybody that finances me wants some involvement in my operation, and I would suggest the government is no different.
In my experience, I have found that government generally has consulted with industry before making decisions about the people that they appoint to boards of directors. In most cases, it has been a very good relationship. They are good people, knowledgeable, and varied, and not necessarily chosen exclusively from government. Some are chosen from industry. They choose the right people.
I do not see why it would be any different if Bill C-4 were enacted. I consider Bill C-4 to be enabling legislation. I am not quite as scared as most people are of it because, if we have a board of directors that is worth their salt -- and I suggest that it is up to the producers to choose good people -- and if they run the corporation as it should be run, they will indeed run a tight ship.
The Canadian Wheat Board is one of the biggest corporations in the world, certainly the biggest in Canada, with a $6-billion involvement in the grain industry. However, I think it is time that we allowed the farmers to run their businesses.
I have one comment for your consideration. I would like to see the CEO or president, if they are one and the same, being hired by the board of directors. A problem we run into in most of our farm or agricultural debates is that the debate becomes polarized, and only short of being capital "P" political. Everybody seeks advice from their person on a board or whatever.
If the CEO were selected by the board of directors, they would be responsible for the decisions made, the direction given and, in actuality, their fiduciary responsibility would be complete.
I would suggest to you that, if the government appoints this person, they could use the excuse that have no hold on the individual, that he is not responsible to them. That could result in a chaotic situation. That is the one particular change that I would focus on, and that I would suggest be made.
We have not talked about what happens if we do not have the Canadian Wheat Board, or if it is an ineffective board. We have control within Canada of export grain because we have a pooling system to which most farmers subscribe. A pooling system is more than just an averaging price system. A pooling system is a marketing tool that allows a very varied Canadian grain system to be marketed over a year's period in a manner that will allow the market to function properly.
Every producer wants a cash flow. They would like to have access to that market, and they would like to do it at any time they desire, and I would suggest that the Canadian system, as it now exists and probably will for some time to come, cannot withstand that kind of freedom. It is fragile, it is shrinking, and it is high cost, and we have not learned how to deal with that yet.
In 1990, I was part of a review panel of the Canadian Wheat Board which produced a report, a copy of which I have with me. I do not know if many people have ever taken the time to read it. I know it was left lying on the shelves for two or three years before anyone even recognized that we had done something.
In our report, we suggested that the structure of the Canadian Wheat Board should become a corporate structure. It is recognized, in the world scheme of things, that a corporate structure is more identifiable in the system we now have. Our panel discussed many of the issues which are dealt with in Bill C-4. I would suggest that it would be worth perusing our report. I believe our recommendations are still valid, even though it is now eight or nine years later.
In my opinion, there is nothing wrong with having a contingency fund, although that seems to scare people half to death. It would be in the hands of the board of directors, and they would make the marketing decisions. For farmers to look after their own risk, they would require a backup to cover them in the event of adjustments or business decisions that went awry.
This is already used by the Australian Wheat Board, and it has been accepted by producers. It is working well. We could use that as a guide.
I have no problem with either the exclusion or the inclusion clause. This will allow the board of directors to have control, but the ultimate decision will rest with the producers. I see nothing wrong with that. I think that this is enabling legislation, and both of those tools should be there because, if it is right to exclude a grain, I think it is also right to have the option to include a grain if good business decisions require it.
The Chairman: Mr. Jackson, would you please proceed?
Mr. Thomas Jackson: Thank you, Mr. Chairman, for this opportunity to make a presentation. I would also thank you for your studious assessment of the bill and for coming out to Western Canada to hear the opinions of the people affected by this proposed legislation.
I am a fourth-generation farmer. We farm 4,000 acres in the Sherwood Park area. I am connected with a farm in the Westlock area that farms another 6,000 acres. I am involved extensively in the marketing of the products for those two farms, and I am very concerned about what has come forward from the Canadian Wheat Board in the last two years.
Two years ago I voted for the Wheat Board to maintain a monopoly on my wheat. Sadly, I believe I was deceived. I have had to completely reverse my position because of the lies that have been told. That is why I am here today.
The propaganda that the Prairie Pools the NFU put forward are no more than wishful thinking. You can turn, in my submission, to the Canadian Wheat Board vote of 1973 where you can read the propaganda at your leisure. I believe Senator Whelan was involved in that particular situation.
If I have to depend on the Wheat Board for the marketing of my feed barley or feed wheat, and if I look at the PROs, the $1.13, that the Wheat Board has told me that I could receive in the fall for my barley, at which I would lose $47 an acre, how can I conclude fairly that canola, which gives me $167 an acre in the open market system has me down? Of course it has not.
The left wing, which has introduced so many measures which entitles them to take my property, tell us that the Canadian Wheat Board is an efficient mechanism to spread risk. I maintain that the world's commodity exchanges have more efficient, effective ways for me to manage my risks effectively.
The Canadian Wheat Board has told us that they efficiently manage grain stocks to the benefit of farmers. My experience is that the Canadian Wheat Board does not effectively manage grain farmers' risk and, in the last five years, they missed a number of opportunities that could have made my farm worth hundreds of thousands of dollars more.
They do not effectively manage the co ordination of delivery and transportation from our position, and in 1996, the closure of the Prince Rupert terminal for four months was absolutely detestable. When the 20-year highs in grain prices were reached, they shut the transportation system down and left us high and dry. It is not fair.
The Canadian Wheat Board claims that they create a low-cost grain handling transportation system. The only conclusion I can reach as I see the hundreds of millions of dollars being spent on new concrete that is going into the ground all over the Prairies is that goes completely against the new "identity-preserved, direct connection" between the customer, the end users, and me as a farmer. I want my product to remain a special product. I do not want it to go through some huge terminal. We have to become more identity preserved. That is where the world is taking us.
The board tell us that they always provide the maximum returns for western grain farms through pooling. I cannot accept that for a moment, because I have been in a number of situations where the pooling system has prevented me from maximizing my returns.
To go back to the Cattlemen's earlier submission today, I maintain that if I were the CEO of the Canadian Wheat Board, and I extracted a premium out of feed barley, feed wheat and all the feed products, I would be turfed out of that position so fast for disrupting the Canadian economy I wouldn't know what hit me. There is no way that they will allow farmers to extract a premium because it disrupts the whole system. This is a farce. They never intended this to happen. It transfers the market signals to western grain producers. I would suggest that, if canola were, today, under the board -- the vote had gone the other way in 1973 -- we would be offered $6 a bushel for our canola, simply because they would try to maintain a price relationship between wheat, barley and canola, and we would not want a distortion in the acreage.
I would further suggest that the low estimates of the 1998-1999 feed barley and feed wheat will create a problem for canola, because more acreage will go into that than should be the case. That is because true market forces are not being transferred to producers.
We must choose the sales techniques that will provide maximum benefits to Western Canadian growers of wheat and barley, and further set up long-term contracts. I ask you: How can the Canadian Wheat Board, when it has been subjected daily to new judicial actions against its constitution, against its actions, enter into good long-term contracts? They cannot, because everyone knows it is like dealing with a company in bankruptcy. It is being attacked from every direction. How can we expect that organization to have good credibility with our customers?
They are mandated to create floor prices and compensate farmers when world markets drop and are poor. They do not. They normally start at 75 per cent of the bottom of the PRO, which last year in Saskatchewan ended up to be $.82 a bushel on the initial. That was when the open market was offering $2.30 a bushel for the same barley. Tell me how in the world that creates a floor price? I think it creates a lower floor for the cattlemen, and that is where it is coming from.
The Canadian Wheat Board is to provide dependable pricing information that farmers can use as a planning tool. It does not. If we had relied on the Wheat Board pricing information in the last PRO projections, we would have 5 million acres of barley and the cattlemen's cattle would have starved. It is a distortion which our economy cannot stand.
We are told that another job of the Wheat Board is to prevent quality problems with western grain and effectively manage the quality. The excrement of deer and mice and all those things are proof positive that the Canadian Wheat Board has no control over quality. It is the grain commission and the grain companies that create the quality that the Wheat Board can sell. I read endless newspaper articles about how the Canadian Wheat Board has the highest quality. In fact, the farmers of Western Canada provide the highest quality grain in the world. I am saddened when I hear everyone praising the Wheat Board when it is the farmers who produce the quality grains.
I was in Winnipeg when Mr. Justice Smith handed down his decision in the Dave Bryant case.
Senator Stratton: What page is that?
Mr. Jackson: At page 7 I have quoted Mr. Justice Smith who stated:
There is a right to enjoyment of property under the Bill of Rights and a Person cannot be deprived of that right without due process of law. It is clear that the provisions mentioned above did not provide for a challenging of the value to be paid for the grain and that the question of applying for the export licence leaves no room for any discussions.
That brings me to the last part of my presentation, and that is marked "notwithstanding clause." This is a civil rights issue. I produce grain on my farm using what the good Lord has given us -- the sun and the rain -- and I have the help of those who come during the harvest. I have a problem with my neighbour coming down the road and saying, "I am going to take your grain to make mine worth more money."
Number one, that is coveting; number two, it is theft; and, number three, from what I have been able to find out about the Wheat Board, it is bearing false witness against my neighbour, because the Wheat Board is not extracting a premium in feed barley, feed wheat, in No. 3 Red, or in CPS. Those are common commodities on which they cannot extract a premium, and they have no business in being in them if they cannot.
I would suggest that either an opt out clause be included in Bill C-4, or you solve all the judicial problems by invoking the notwithstanding clause in the Canadian Bill of Rights. Then it will not be hammered by everybody from every direction. I and my customers have to deal with the judicial chaos that could arise.You, as the Senate, have the obligation to either tell the government to invoke the notwithstanding clause, or to allow some kind of opt out.
Senator Hays: An enormous amount of work has gone into the preparation of these presentations. Thank you for that and for taking the time to make them.
My question is to all of the panel. However, except for Mr. Livingstone, I am not sure what your positions are on the details of the bill.
Since one of you is a past chairman of the Alberta Wheat Pool, I want to touch on the delegate selection process as opposed to the direct election of directors, and the value of one over the other.
Mr. Jackson: I am involved in many organizations in Alberta. I feel that direct election leaves me more accountable to the citizens that I represent when I am elected as a commissioner on a certain commission. I feel a direct connection with each of those people in my constituency, and a direct moral obligation to represent each of them rather than some fuzzy group of people.
I think it really depends on the person who is representing the people, and how strongly he or she believes in that commitment. However, I suggest that it allows more direct communication between the director and the producer who this person is supposed to be representing. One reason the Parliament of Canada MPs are elected the way they are is because there is direct accountability to specific people.
Mr. Livingstone: Senator Hays, I appreciate the question. I look at the bill as it is presented, and it suggests that two-thirds of the producers will be elected and five appointees which includes a CEO or president.
With the risk of sounding facetious, it seems that not many Canadians are ever very happy with governments, whatever political stripe they are, yet, they elect them. I am not sure that, by electing a board of directors from the producers, we are going to keep everybody happy. However, it does bring with it accountability. I have to agree with Mr. Jackson on that.
In the corporate world it is not uncommon, even if they have an elected board of directors, for them to go outside their own board and appoint people with some expertise. I do not see any danger in this. The balance appears sufficient to allow the producers to remain in control, and the producers will have accountability. Those directors who are elected by them will be accountable to the people who elected them.
If the process is set up right, I think it could work, but again, people make things work. If the right people are there, it will work well. If the wrong people are there, it will be a disaster whether we elect or appoint them.
Senator Hays: Of the 10 elected, either directly elected or elected through the election of delegates, who, in turn, will elect from their number one to serve as a director?
Mr. Livingstone: That will be an interesting process, Senator Hays. There are ways of setting it up by districts, not unlike some of the cooperative systems within Canada. That would probably ensure that those people would be accountable to an area. We would not have directors at large or whatever. I have listened to some of the rhetoric about that, and it appears that most of the producers, including producer organizations, have suggested that is one system that could be used, that is, set up a district system, not unlike the advisory committee that now exists, so that the people who come from an area must be elected within that area. I agree with that.
Mr. Comfort: I think you have to consider the amount of grain produced by certain producers. Who is producing all the grain in this country? Mr. Livingstone admitted he produces only enough grain to feeds his animals. I believe something like 17 per cent or 20 per cent of farmers are producing 60 per cent to 80 per cent of the grain, depending on the year. We could have representation by farmers who qualify as farmers, but who do not have a lot of grain to move.
The same situation applies to the political system in Canada. Although candidates in political elections may get 20 per cent, 30 per cent or even 40 per cent of the popular vote, they are not elected because of the split within that constituency. Having a vote does not necessarily indicate how many people voted for a particular candidate. I would throw that out as a serious problem.
Senator Ghitter: Mr. Livingstone, the board consists of 15 directors, 10 of whom are elected. Let us assume that the majority of the board of directors were elected on the basis of policies which were contrary to the government or contrary to the Alberta Wheat Board as we have known it. Can you visualize a chaotic situation arising because the board would be controlled by individuals who held a different view from that contemplated by the legislation? Perhaps some people would get together to find a way to subvert the board. That could be done. Have you ever thought about that?
Mr. Livingstone: Senator Ghitter, I have thought about it, and it really does not worry me. When elected, boards of directors have a fiduciary responsibility to a corporation or an organization to do the right business things. I remember a lawyer once telling me that he could protect me from everything excepting stupidity. Obviously, they will have to make some good business decisions. I do not care what stripe they come from.
Mr. Jackson and I have debated this before. I do not always see eye to eye with his viewpoint, but if Mr. Jackson is sitting on that board of directors, he will have to do the proper business thing. Collectively, you cannot put 10 stupid people together. They will do the right thing because, first, legally, they will have to. Second, I think they will be astute enough business people to do what is necessary in the time frame and in the times they are entering into.
Senator Ghitter: They also may regard their responsibility to be more to the farmers than to the government, as so many have suggested throughout the course of these hearings.
Mr. Jackson, do you have any thoughts on that?
Mr. Jackson: I have provided tables in my presentation which show the concentration of production. I have also shown where the profit on my farm comes from. I would suggest that, when 38 per cent of the grain producers are marketing only 4 per cent of the actual grain, we must have a major problem dealing with demographic realities. Of course, there is also the large farm-small farm split.
From the corporate perspective, if the legislation states that I must do what is in the best interests of the corporation, I cannot do what my producers want me to do. I must, by law, do what the government wants, and that is the orderly marketing of grain, whether it is to the detriment or the benefit of the growers I represent. Under Bill C-4 I will be unable to put forward that argument.
Senator Hays: The other question I have is with respect to the evolution of the board, as anticipated by the government today, assuming Bill C-4 passes. How does what is contemplated to be achieved by passage of this bill compare with the recommendations of the Western Grain Marketing Panel? The major difference that comes to my mind is with respect to barley.
Mr. Comfort: I made a presentation to Western Grain Marketing Panel. At that time I was the president of the Oat Producers Association of Alberta. In that presentation, I indicated quite clearly how beneficial it would be to exclude oats from the board was. That will continue to be the case as long.
Farmers with very poor quality oats would haul them to the board elevators where they would be blended. The board would then export those very poor quality oats and our reputation for good quality would suffer.
When oats came off the board, although it took a little while for the market to clear itself out, they have done very well in the export market. The United States has since significantly reduced its production of oats, so we have a large customer for our oats just slightly south of us. It has made quite a difference to Saskatchewan agriculture, Alberta agriculture, and to Manitoba agriculture.
Mr. Livingstone: I realize that Bill C-4 does not adhere to all of the recommendations of the Western Grain Marketing Panel. I have worked with some of those people in the past on other projects and talked with them about it.
I find your comment on barley rather interesting. In this province we have what some might call a "micro" market, but that is really a misnomer. It is not a micro market. We have a very large feed grains market within Alberta, and we do have a dual market here, but it does not get out of line for the simple reason that the southern Alberta feed lot concentration has access to U.S. feed grains if barley ever got out of line.
I would suggest that, because of that market, we have an artificial market within this province. It has no relationship to the world situation. I just spent a little time two weeks ago at Grain World in Winnipeg where I listened to international speakers. It was probably the most dismal and distressing two days I have ever spent. Grain farmers, livestock producers and others were presented with what to expect in the world markets in the next year or two.
Contrary to what most people would like to criticize the board for, the world situation dictates that the board cannot get more money in the international markets than what is being offered right now. In fact, I think they are somewhat at risk offering the prices they do, and that is because of what we are facing with an international market-place. We must remember what the Europeans did recently in starting a subsidy war. We were prepared to offer $37.50 a tonne for barley, for example, for a one-day period, almost at a price where we could not give it to them and make a market, and the U.S. was preparing to counter that. If we get into that situation again, we will not have seen low prices yet in Canada.
That is the reality of the world market, and what we are comparing it with is not an apple-to-apple situation, because we have some micro markets within Canada that have no relationship to the real world market.
With the production levels that we have in Canada we will end up in a situation where we have to market most of our production in Canada. We cannot consume it. Domestically, we can only consume a couple of million tonnes of wheat. We have got to market the rest. That is not so in the case of barley production. If the numbers for the Western Canadian barley production this year are correct, few people will grow it, only because they need some for themselves or they think the market might readjust somewhat, and they will make a dollar. However, there is no money in it right now. You cannot even break even producing barley. That has nothing to do with the Canadian Wheat Board. That is the reality of the world market situation.
I am not worried whether Bill C-4 covers the recommendations of the panel. Again, as I said, it is enabling legislation, and if the board of directors is put in place, they will make the right business decisions to take advantage of market opportunities.
The Chairman: As you know, this committee is considering the state of agriculture in Canada and we will continue to do that.
In the course of our studies, our researchers have found that the latest statistic indicates that the return on agriculture investment -- that is for all agriculture in Canada, dairies, farming, wheat, grain, and so on -- is 3 per cent. That is pretty low. Do you have any comment on that?
Mr. Jackson: If you look at the page before "Introduction" in my presentation, you will see a graph indicating the 1998-1999 Alberta projected grain income from wheat, barley, and canola. It shows what the board has projected could be the low price on barley. That would lose me $47 an acre. Their highest price only makes me something like $17 an acre. The open market, the off-board market, makes me somewhere around $40 an acre on barley. The off-board feed wheat market makes me somewhere over $50 an acre.
Mr. Livingstone has said that there is an artificial market in Alberta, and I strongly disagree. On January 1, 1998, the border was open to Lethbridge. U.S. barley producers can now freely bring barley into Canada. The only reason barley prices are higher, is that European barley, if it were to come through the rail transportation system into Alberta, would cost a lot of money. When corn is trading on the commodity futures in December of 1997 for $2.65 U.S. a bushel, you cannot justifiably say that $1.13 is a fair price for barley. It is not. The world commodities markets are not saying that it is worth less than $1.13, and no one can produce it for $1.13, and so I would suggest that to be fair. The Western Grain Marketing Panel report recommendations must be implemented, because it is obvious the kind of distortions that the Wheat Board throw into the situation create chaos for everyone, and we cannot afford that.
Senator Fairbairn: Many people seem to find Bill C-4 irrelevant because they believe that the Canadian Wheat Board is irrelevant.
However, if you start from the premise that the purpose of the bill is to make the board more responsive and more connected to producers, isn't one of the ways of doing that to open up the board to the election of farmers? Is it not possible that elected members of the Canadian Wheat Board, who are to bring in the views of farmers, work for the farmers, cannot at the same time work in the interests of the best possible functioning of the Canadian Wheat Board?
Somebody drew an analogy to an elected Member of Parliament. An elected Member of Parliament obviously has direct responsibilities to constituents he or she represents, as well as a responsibility to the country. That is a reality. In fact, some members of our committee have been Members of Parliament, specifically, Senator Whelan, Senator Gustafson, Senator St. Germain, Senator Robichaud, and Senator Ghitter has been elected here in Alberta.
I think it is possible to do the job. The bill states that a director must serve in the best interests of the board, but I do not see that as restricting an elected member, who is a farmer, from acting in his or her capacity and making it a better board, consistent with the best interests of the farmers who they also represent. I would like the views of panelists on that.
I have one other question which I would direct to Mr. Livingstone because he raised the issue, as others have, about the CEO, and the notion that the CEO would be solely selected by the board. Do you see that as being the case, or do think there will be a "joint choice", if I may call it that, involving board members and the minister?
Mr. Livingstone:I must agree with you in that I see no conflict. There should be no difficulty for a person who sits on the board of directors to represent the people who elected him and for him to make the best business decisions on behalf of them. That is what the Canadian Wheat Board is supposed to be doing, should be doing, and in all likelihood will be doing with a board of directors that is representing the interests of the producers. That is the board's mandate since its inception. I do not see that changing, and I do not see that conflicting with the making of good business decisions which are in the interests of the producers.
There may be occasions when all the producers may not view a certain decision as being in their best interests, but the decision, I would hope, would be in the general interests of producers of Western Canada or all producers in Canada and certainly for the corporation's viability.
As to your second question about the CEO, my experience, from sitting on boards of directors in the past, is that the accountability which producers have been asking for in all likelihood will, for nothing other than perception, make it necessary for them to be in control of who brings the CEO's position to their table. The government will have some input into that decision, I would suggest, along with the five appointed members. I think that the balance is there. It should not be a problem in anybody's mind, and it should eliminate any perception of patronage. If the board makes that decision, it would help ensure the long-term viability of the new organization.
Mr. Jackson: The Canadian Wheat Board is a monopoly and, in any other business situation in the country, it would be illegal as well as immoral. There is public interest involved here that only Her Majesty can display. You are not dealing with the normal selection of a CEO and directors. You are dealing with the public interest of Canada which has control over this monopoly.
On page II, section e) of my brief, which is the third page in, I reiterate that the Wheat Board claims that it always provides maximum returns to producers of western grain. Only a farmer can decide when an acceptable return occurs, and what marketing risks his or her farm can afford. The Wheat Board takes this marketing risk and places it upon my farm, even though I did not make the decision. I object to that.
How in the world can a director visit every farm that he is supposed to represent and ask how much market risk the farmer can afford this year? It is impossible. If they did do a great job of maximizing returns, the Canadian cattlemen would be accusing them of destroying their industry and of destroying supply-management industries.
This is a monopoly. It cannot be doing these kinds of things in the best interests of farmers only. That is where the major polarization problem lies. It cannot do what the proponents of the board say it should do because it is against the law.
Senator St. Germain: What we are hearing as we go across Western Canada is that it is government doing things "to" people instead of "for" people.
We also heard yesterday that there is concern and deep dissatisfaction that the vast majority of MPs who voted for Bill C-4 represent areas which will not be affected by the passage of this bill. Being from British Columbia that concerns me somewhat.
Do you all believe that the Canadian Wheat Board really has the support that Wheat Board supporters say it has? As well, is Alberta unique in that there may be more people against it in Alberta than the other two prairie provinces?
Mr. Comfort: Personally, I know many people in this province who deal with the Wheat Board, but they do it on the basis of trying to sort of inveigle the Wheat Board into continuing to buy their grain. They make crow with the dealer and, who knows, they may even get a free bottle of whisky out of it. They want their grain bought by that particular elevator system.
What really disturbs me now, however, is the sell-out that is taking place in the agricultural or the agri business in this province. Quite a number of agri dealerships in this province, prior to this year, were independent, but they are no longer independent. They sold their business to another company. Farmers no longer have the option of buying fertilizers and seed from local people. Approximately 60 per cent to 70 per cent of the new seed varieties are controlled by certain companies.
The Wheat Board has not helped to give the market signals to farmers so that those who want to risk and those who want to try something different can be make decisions about that. Mr. Jackson is absolutely correct, this is purely a Crown monopoly of wheat and barley sales. A lot of us have bought into the idea that we have to be looked after, but some of us no longer want to be looked after, at least not totally. Not a hundred per cent. Maybe only 85 per cent. Farmers are willing to risk that 15 per cent. We need that option.
Mr. Jackson: The title of my presentation, "Old Habits Die Hard", is appropriate. If we think back to Senator Whelan's time in 1973 when canola or rapeseed was prospectively being considered by the board. At that time there were many more marketing tools available to us. Today, some of those marketing tools are in conflict with many of our trade agreements. What it was proposed we do with canola in 1973, I maintain, cannot be done with respect to wheat today.
Prairie producers know that the board can no longer support us. I went on a hunger strike in March and April of 1996 because I know that, basically, the federal government is broke. They owe hundreds of billions of dollars, and I did not want to have to trust in safety net programs to try to support my farm and the dozens of people that my farm employs. I wanted the marketing tools that investors all over the world have available to them which allow me to use the grain exchanges, where I could have got $8 a bushel for my wheat, whereas the Wheat Board gave me $4.20 a bushel. I lost hundreds of thousands of dollars.
The government is involved in all sorts of training courses, but it is useless to teach us all these things when they turn around and introduce Bill C-4 which gives the government the power to continue to do it all for us. They have empowered us to do nothing. That really disturbs me, especially when I think of my son Daniel, who is with me today, who I am trying to convince to be a farmer. How in the world can I convince him to be a farmer when you handcuff my hands behind my back, and I know you will do it to him as well in the year 2020?
Senator St. Germain: You never answered my question, though, about whether or not you feel that the Canadian Wheat Board has the majority of the support it professes to have. You made mention that you belong to several organizations, and that is why I asked you the question. Can you give me a response please?
Mr. Jackson: The response is: I believe that most Canadians believe there should be freedom of choice and in the Christian principle that I should not covet and steal my neighbour's property. They do not feel it is right that anyone should have the right of enforcement over his neighbour. Therefore, I believe the majority definitely do suggest there should be freedom of choice, one way or another.
Senator Whelan: We talk about this great global situation. I remember, during the 1970s, the Russians organized a buying spree. They did not know what they were doing, and they bought from all the major grain companies in the United States, and that shorted the markets. Butts was the Secretary of Agriculture in the United States of America, and he had to impose export controls. We, in turn had to put export controls on for soybean meal and soybeans, and other crops that we were using for our livestock. I am just pointing out that all is not rosy in that picture you paint.
You mentioned cleaning and handling and you talked about the Canadian Grain Commission rules. We used to ship all our dirt to the coast, and that cost a lot of money. The Japanese used to buy it and make it into little biscuits for their livestock. I do not understand what you are talking about.
Mr. Comfort: May I interject and respond to that? It is expensive for us to haul and ship grain to the coast and pay dockage fees, but it is more expensive when, once we have already charged the farmer for cleaning it, we ship grain that is full of manure which is rejected and sent back to us on boats.
Senator Whelan: You and I both know what we are shovelling when we shovel it. We don't want any deer dung or any kind of dung in grain. The farmer was as guilty as anybody for allowing to happen that when he shipped it.
Mr. Comfort: As I said, the board is a vehicle the farmer uses to try to inveigle someone to buy his grain.
Senator Whelan: I want to address my good friend Senator St. Germain who has made a lot of money out of farming and the poultry business. As was mentioned, supply management would be hurt if the price of their input goes up.
When you look at the financial pages, you see that the big grain companies have never made so much money on grain. They have never made such huge profits. However, you both quote religion, and you must admit that one of the fundamental beliefs of any religion is that, "you are your brother's keeper." Yet, from what you have said, I get the impression that you are both being a little selfish.
I went through open-heart surgery just a year ago, and I have strong religious convictions. As well, as president of the World Food Council, and I had to study the different beliefs that are held around the world. I know that I am alive because of prayers. Just the other day I told Mr. Chrétien that the only reason God let me live was so that I could be his conscience.
Mr. Comfort: That helps him, but it does nothing for us, sir. It does nothing for the Canadian psyche.
Senator Whelan: We have the best country in the world.
Mr. Comfort: I would recommend Dan Morton's book, The Great Grain Robbery. It is certainly worth reading. Perhaps it should be night reading for most Senators. It details an amazing feat that a company that was working with the Russians pulled off.It got grain from the United States without them knowing it. It took it from under their noses.
Senator Whelan: I am sure you know that the Russians made a 100-per-cent profit on it.
Mr. Comfort: I am sure they did, but the grain company did the deal also made a very large amount of money.
Mr. Jackson: I would like to respond to Senator Whelan's comment, "you are your brother's keeper." If my brother, with enough conscience, asks me for something, I will give it to him, including my life. That is how strongly I feel about this issue. If my brother comes to me and says to me, "please stop stealing my grain," I feel just as obligated to help my brother. That is why I am here today.
The Chairman: Thank you all for a very interesting morning and some very detailed presentations.
I want to say on behalf of the Senate that we have heard some excellent presentations in the days that we have been in the rural communities of the three provinces.
The minister will be appearing at one o'clock. We will try to start as promptly as possible.
The committee adjourned.