Hon. J. A. MacKINNON (Minister of Trade and Commerce):
Mr. Speaker, I have an announcement to make at this time with regard to wheat policy. In doing so I am speaking for my colleague the Minister of Finance as well as for myself, and I am also referring to matters that come more particularly under the jurisdiction of my colleague the Minister of Agriculture.
As an important element in price control, the government, through the wartime prices and trade board, has maintained maximum prices for wheat products milled and sold in Canada for human consumption. This programme has been in effect since August 1, 1942.
These ceiling prices, very important from the standpoint of living costs during and since the war, could only be maintained if wheat were provided to processors on the basis of prices existing in the base period in the fall of 1941. It was established that the highest cash price of western wheat during the base period was 77| cents per bushel for No. 1 northern wheat in store Fort William-Port Arthur. Effective on August 1, 1942, when the board's fixed initial price was increased to 90 cents per bushel, the government provided for a drawback to be paid to mills and other processors of wheat for consumption in Canada. This drawback was the equivalent of the difference between the basic price of 77$ cents per bushel and the monthly average price for western wheat. Since September, 1943, the drawback has been based upon the difference between 77| cents per bushel and the prevailing domestic price of $1.25 per bushel.
On September 27, 1943, trading was suspended on the Winnipeg futures market and the government, through the Canadian wheat board, took over all unsold stocks of wheat in commercial positions. This wheat became the property of the government with no further producer interest. These crown stocks, amounting to nearly 300 million bushels, were then used for mutual aid purposes and wheat for the domestic market. They were disposed of at approximately the prices at which they were acquired. These crown stocks lasted until January, 1945. In acquiring additional supplies of wheat for mutual aid purposes early in 1945 the government paid the board's current com-
mercial price, which was SI .46 per bushel, less an allowance for carrying charges. At that time, however, the government felt that over-all price control in Canada required the establishment of a domestic wheat price. Consequently the Canadian wheat board was directed to make wheat available for domestic consumption at 81.25 per bushel which was the fixed initial price being paid to western producers. The government continued to absorb carrying charges on domestic wheat and continued the drawback to processors to maintain the basic price of 77$ cents per bushel. This arrangement has continued up to the persent time.
This part of price control has involved the expenditure of public funds. Drawbacks paid to processors of wheat products sold in Canada have for the past three years, been running at the rate of $18,000,000 to $20,000,000 per year. Under the system in effect since August 1, 1943, millers and other manufacturers of wheat products have been required to refund all drawback which would have put them into the excess profits category.
The field of price control in Canada is being progressively narrowed and the government is of the opinion that the Canadian wheat board should no longer be required to sell wheat for domestic consumption at $125 per bushel. Accordingly the government has decided that Wheat shall be sold for domestic consumption on the same basis as provided in the United Kingdom contract. The government has therefore directed the Canadian wheat board to advance the domestic price of wheat to $1.55 per bushel plus carrying charges. This direction is effective at once.
I wish to state explicitly that prevailing ceiling prices on flour, bread, mill feeds and other wheat products are not affected by this change in the board's selling price of wheat for domestic consumption. The government, through the treasury, will continue as in the past to make wheat available to millers and other processors at prices appropriate to these ceilings. The government regards this continuation of price ceilings on flour, bread and other wheat products as a necessaiy part of its programme of orderly decontrol.
The feed wheat subsidy of 25 cents per bushel is being continued, but the increase in price to $1.55 per bushel plus carrying charges will mean an increase of slightly over 30 cents per bushel in wheat used for feed in Canada. Because of the continued overseas demand for wheat for human food, the government feels that as far as possible grains other than wheat should be used for feed purposes in this country.
I should like also to announce at this time that the Canadian wheat board is today establishing open delivery quotas for oats and barley, effective immediately for the remainder of the crop year.