Hon. Perrin Beatty (for the Minister of State (Grains and Oilseeds)) moved

that Bill C-92, an Act to amend the Canadian Wheat Board Act, be read the third time and passed.

Mr. Lee Clark (Parliamentary Secretary to Minister of Agriculture):

Mr. Speaker, as you know, the amendments before us today regarding Bill C-92 are designed to improve the efficiency of the Wheat Board. They are amendments which are suggested to the Government both by the Board itself and by producers. There are six amendments in total. They have been discussed in considerable detail in committee and in the House at various stages. Thus I will spend only a few moments on them this morning. I believe they have the support of the House in general.

The first amendment would ensure that quota and other delivery provisions under the Canadian Wheat Board's marketing system would fairly apply to deliveries of grain to railway cars as well as to those who are delivering to the primary elevator system. That is designed to ensure that there are no special provisions given to users of producer cars that are not intended.

The second amendment would enable the Canadian Wheat Board to take advantage of a broader range of financial markets for borrowing and investment purposes. Up to this point in time the Wheat Board, which is a major borrower, has been borrowing almost exclusively from chartered banks. We believe it would be to its advantage to give the Wheat Board the prerogative to borrow in a wider range of markets if it so desires.

The third amendment would add Canola to the definition of grain for the purposes of this Act. This is simply a reflection of

showing the importance of Canola within the world community and, of course, is of extreme importance to producers in western Canada.

The fourth amendment, which is the amendment that has received some considerable attention throughout the country, would permit the Canadian Wheat Board, subject to Governor in Council approval, to adjust payments to producers who deliver grain to a railway car instead of to a primary elevator to reflect reduced carrying costs incurred in the handling of this grain. At the moment the situation is that users of producer cars or railway cars are paying for services which they do not receive, that is, storage costs and interest costs that are applied, assuming that the grain would be going to the country elevator system when in fact it is not. It is bypassing the country elevator system and going directly into the railway car.

The fourth amendment would permit the Government, upon the advice of the Wheat Board, with the concurrence of the Minister through Order in Council, to reduce a portion of those costs currently paid by producers for services they do not receive. In times where we are trying to reduce the operating costs of the farm community, we think that it is only logical to do everything we can to assist to make this amendment possible to permit the Governor in Council to pass on a share of those savings to the users of producer cars.

The fifth amendment would permit the board to pay advisory committee members a per diem, a relatively minor sum, one would assume, for the role that they play in advising the Wheat Board.

The sixth and last amendment would provide that the Act or any of its provisions would come into force on a day or days to be fixed by proclamation. Essentially that is a housekeeping item.

The committee held hearings on Bill C-92. A number of witnesses appeared. There is general support for the amendments. Certainly the users of producer cars who represent a small percentage of the population on the prairies, but an important one, are happy with the amendments. Barley growers in western Canada are happy with the amendments. Western Canadian wheat growers are very supportive of the amendments.

Mr. Benjamin:

Fifteen hundred farmers. They don't amount to many.

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Canadian Wheat Board Act

Mr. Clark (Brandon-Souris):

1 see that the Hon. Member for Regina West (Mr. Benjamin) who is anxious to become the agriculture critic for his Party is present and making his usual interventions.

Mr. Benjamin:

I have been around that business longer than you have.

Mr. Clark (Brandon-Souris):

The key thing in the amendments is that up until this point in time farmers have been charged for services which they have not received. We simply do not feel that that is a philosophically sound position. We feel that it is appropriate that those who use the services should pay for them. If we establish in the future that users of producer cars are receiving services for which they do not at present pay, then it would only be appropriate at that time to pass those charges on to them. At the moment it is very clear that the users of producer cars or railway cars are paying for services that they would use if they used the country system. Therefore, it is only appropriate that they should not pay the total cost currently charged to them. I would point out that under the amendments they will continue to pay a certain portion of the costs which would be incurred if they were to use the service. In that sense, we feel that they are paying for a share of the line elevator company expenses, and we think that it is just.

On behalf of the Government we are happy to bring Bill C-92 to third reading. We believe that it has had an extensive debate and we hope that it receives the concurrence of the House.

Mr. Maurice Foster (Algoma):

Mr. Speaker, Bill C-92 contains a number of provisions, most of which are technical and not controversial. The provision to allow the Canadian Wheat Board to borrow in foreign markets, from provincial governments, and a whole variety of agencies, provides additional flexibility. I would caution the Wheat Board that other Crown corporations have found themselves in serious difficulty. For instance, Eldorado Nuclear borrowed some $500 or $600 million in Swiss francs. It has borrowed United States dollars in overseas markets. It has lost something like $190 million on foreign exchange trading. The Wheat Board deals with much larger amounts of money than Eldorado Nuclear, but it is still a Crown corporation, and great caution should be exercised in this regard. Obviously we want to see the Wheat Board borrow its money as cheaply as possible, but great caution has to be observed by Crown corporations when borrowing in foreign exchange markets, particularly when the Canadian dollar and the United States dollar have lost ground in foreign exchange trading. That caution should be put in place in passing Bill C-92.

The most controversial part of this legislation is the producer car provision contained in Clause 8 which provides for the Canadian Wheat Board to pay a sum to the users of producer cars to cover those services they do not use, that is,

storage charges, interest and carrying charges because they load their own cars. This issue has been very hotly debated. The Prairie Pools Incorporated are opposing it.

In committee, the concern of most people was what impact that will have on the maintenance of the country delivery points if producer cars were to assume a very large percentage of the shipments, because there are certain costs involved which are not storage or carrying charges relating to the costs of country delivery points, for example, the maintenance of infrastructure, and so on. This Bill simply deals with the Canadian Wheat Board Act. It does not deal with the Western Grain Transportation Act which is covered.

I thought that the Government made a mess of things because it would not provide the documentation and the information. We wrote to the railway companies and their response was that they did not know what it cost to maintain a rural delivery point, and they could not give us those figures. We could not put forward amendments relating to the Western Grain Transportation Act because Bill C-92 only relates to the Canadian Wheat Board Act.

I put forward an amendment which was promptly voted down. If the Government is defeated in the next election, it will be because of its overwhelming majority and its assumption that everything that the Opposition puts forward is wrong and does not deserve any consideration. The government Members vote by rote. They automatically vote it down.

My amendment simply stated that the sum refunded to those who use producer cars shall reflect an equitable allocation of the costs incurred by the board to maintain the country delivery points. The wheat pools are not saying that there should not be some reduction related to the storage and handling charges. Obviously, those people are not using the storage and handling charges. They are saying that the maintenance of those rural delivery points is something that comes under another Act and cannot be amended in this Bill.

That is why I put forward an amendment which would have relieved some concern. We do not know, but perhaps those storage, handling, and elevator charges are identical. If the Government had come forward and stated that the cost for charges which are not used is much more than the cost of maintaining the rail sidings and the country delivery points, there would have been some balancing. But the Government did not do that and, of course, it did not accept the amendment. I do not understand why the Government did not accept the amendment. I hope that the Senate will consider it. Apart from striking the whole clause which is proposed, it seems to me that it strikes a balance that we tried to reach, that people who use producer cars pay their fair share of the country delivery points and still may be eligible for some reduction in those costs which they do not use, but the Government did not accept it.

July 15, 1988

I would like to read a most urgent and telling communication which members of the Standing Committee on Agriculture have received, signed by Bill Strath, the President of the Manitoba Pool Elevators, who acts as the person responsible for Prairie Pools Inc. As well, it is signed by Garth Stevenson, the President of the Saskatchewan Wheat Pool, and by Mr. D. E. Livingstone, the President of the Alberta Wheat Pool. This came from an urgent message on July 8, the day that we dealt with report stage and concurrence. It was addressed to all Members of Parliament, and it said:

The Board of Directors of Prairie Pools Inc., meeting in Calgary today, reiterates its strong opposition to inclusion of Clause 8 of Bill C-92, amending the Canadian Wheat Board Act.

Prairie Pools Inc. is a western based farm organization with a membership of 130,000 farmers in Manitoba, Saskatchewan and Alberta.

Clause 8 would allow the Canadian Wheat Board to waive interest and storage charges on grain shipped in producer cars.

The farmers' right to use a producer car must be maintained. However, the only savings that should be deducted are elevation and handling costs. Any further deduction of storage will likely add to the costs of those farmers using the country elevator system. The infrastructure costs of western Canada's grain handling system are not charged to the users of producer cars.

That is the point I have been making here this morning. The whole section of the infrastructure relating to the country delivery points is not covered in this Bill and cannot be covered because the Bill does not provide amendments to the Western Grain Transportation Act. The letter continues:

There is clear evidence of extra costs associated with the producer car since these costs are attributed to the railways and are paid for by all producers in the costing process.

You are aware of direct expressions of concern from large numbers of grain producers in the Prairie area. We urge you to take all possible steps to remove Clause 8 from Bill C-92.

That is the nub of the problem. They are not arguing about elevating charges; they are arguing about the storage and interest of carrying charges.

I think that this issue was really brought forward by the Prairie Pools Inc. It is opposed strongly by them because they see a number of straws in the wind against the whole idea of the Canadian Wheat Board. They know that its powers and prerogatives will be reduced by the Canada-U.S. trade deal, that there will be provision for grain to come in from the United States, and they will not be issuing end-use certificates. They know that feed grain will come in and be denatured, which will cost an extra $7 or $8 a tonne, I am told, and that that grain in the end can be used illegally for planting. Many producers in western Canada see the powers and prerogatives of the Wheat Board and the whole system of marketing run down by the Mulroney-Reagan trade deal. They see the whole country elevator system being destroyed or weakened by this, because the producers using producer cars will not be paying for their fair share of the infrastructure for country-delivered points.

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I think that these matters should be taken into consideration by the Government. It did not come forward with a Bill with the whole range of western grain transportation aspects of it. It did not come clean with the exact information. If it had come forward with the data, proving that the storage and interest charges and carrying charges were much higher than the infrastructure cost of maintaining those country delivery points, I think that it would have had a much more telling argument before the committee and before the House, but it did not bother.

Those are the issues which are still with us in this Bill and on which the Government is really missing the point. I hope that when this matter is before the other place it will get more thorough study because, although there was some concern when it went through the agriculture committee several months ago, the intensity of the concern in the prairie regions is much stronger now. At that time we asked for information from the two railway companies. I believe we asked for information as well from the National Transportation Agency as to the exact costs, so that when dealing with this at report stage we would be able to compare. We do not have that information. The situation is no better now than it was at report stage when the Hon. Member for Prince Albert (Mr. Hovdebo) and I put forward amendments to Bill C-92.

I hope that more information can be garnered, if not here at least in the Senate, so that they can deal with this in an effective way. Clearly, there is a lot of concern in the prairie region with this legislation, partly because of the other overriding concerns with the trade deal, and also that the Government has not come clean and has not provided the information. The railway companies have not provided the information. We have a situation where we do not know how much the Government is going to be giving back, whether there will be a tremendous incentive for the people who use producer cars. If we see that, then we know that the Government will be hell-bent on destroying the whole pooling system and the Canadian Wheat Board. There are certainly a lot of straws in the wind in that regard already. These are the concerns as we move to third reading of Bill C-92.

Mr. Les Benjamin (Regina West):

Mr. Speaker, I have to rise again on the whole matter of orderly marketing, particularly the Canadian Wheat Board. This is probably the tenth or twelfth occasion in the last 20 years when there has been a further erosion and the whittling away at the whole principle of orderly marketing, single-desk selling, for all western grain producers through the Canadian Wheat Board and the marketing system which it entails.

The whole purpose and reason for the existence of that system of grain handling and marketing in Canada is to allow the grain producers to co-operatively pool, share the cost of moving the grain and share the benefits from that system. That has worked very well in practice as well as in principle since 1935, particularly since the start of the Second World

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War when the Canadian Wheat Board legislation was fully implemented and enforced.

This legislation has three items in it. One has to do with enlarged financial arrangements for the Canadian Wheat Board so that it can make more investments or whatever to benefit grain producers. Another has to do with some minor changes to allow for improvement in the very, very low expenses allowed for the Canadian Wheat Board Advisory Committee. We have no problem with those two provisions. They are relatively minor. But the fly in the ointment, the bug in the soup, is Clause 8.

Nobody is objecting to the producer having the right to have a producer car should he so choose. That has always been available. Even in years when I was on the railroad and we implemented the car order book, from time to time individual producers would come and order their own cars.

The principle of all of the producers sharing in the costs of the system cannot be and should not be departed from. I listened to the Parliamentary Secretary saying how this makes the western wheat growers happy. I think maybe they have 1,000 or 1,500 members at best. The Saskatchewan Wheat Pool has over 70,000 members. The three prairie pools plus the United Grain Growers, all four farmer owned co-operatives, oppose this and represent something in the order of 150,000 grain producers. They do not want this clause. But it is there to pacify the right wing Tory minority, an extremely small minority on the Prairies and is pandering to those who have always opposed orderly marketing. It is pandering to the private grain companies and the Winnipeg commodity exchange as well.

In a letter to the Minister of State in charge of the Canadian Wheat Board of June 9, the three pools in a joint letter and in separate letters from each of the prairie pools made it as plain as the nose on your face that they were opposed to the Bill because of Clause 8. They asked the Government to reconsider. When they last met with the Minister-they were happy about the consultation that went on and everything else-they waited for the Minister to raise the subject of Clause 8. When he did not report to them about any reconsideration-obviously there wasn't any-the pools raised it as the last item on the agenda, and then followed it up with their letter of June 9 in which they outlined their reasons for the opposition. The item was discussed at every single meeting of every local and sub-district of the three pools in the three prairie provinces. It was discussed thoroughly by the farmers. There would be in total tens of thousands attending those local and sub-district meetings and there was overwhelming opposition to this measure.

I think it is logical that a farmer who ships a producer car is not charged the elevation and handling charges normally assessed at a country elevator since it did not go through that country elevator. That is fair ball. But to relieve that producer

from paying his share of all the other costs means that a smaller number of most of the producers have to pick up all the costs, which means higher costs for the larger number of producers. Surely that is unfair. There are costs that are not being accounted for in the handling of producer cars. The Canadian Wheat Board charges a nominal fee for producer cars mainly to cover the extra administration costs entailed. There are costs such as capital, maintenance, taxes, et cetera on many of the rail sidings in western Canada which are being used exclusively for producer cars. The three pools believe that is a substantial figure and they asked the Minister of State to demand that the railroads provide those figures. There is the extra switching costs involved in the spotting of producers cars at those sites.

One of the economic benefits of elevator rationalization is the least number of stops that freight trains have to make to spot and pick up grain cars. That benefit is lost when you have to stop a 60, an 80 or a 100 car train and switch off one car and then a few days later stop another train and pick it up. Those costs are additional. If there is a siding and no country elevator the costs are even higher. The benefit, of course, is lost and the rail costs are not reduced. They may even increase on a per tonne basis if the spot is for a single car or two, three or four. The railways have told the pools that if producer cars are not loaded in the allocated time the they must be picked up on the next train run. That adds to car turnaround time. A lot of fuss was made over the past several years about reducing turnaround time. At one time I think it was up to 27 days. Now I think we have it down to 17 or 18. When producers do not load their cars on time, it lengthens the turnaround time.

The grain companies, which are 80 per cent farmer owned, have spent tens of millions of dollars not only in rationalizing and modernizing their country elevator system but have spent many, many millions in addition by remodelling and putting the latest technology into their country elevators to provide for higher speed legs, longer car spots to accommodate a faster system for loading railway cars. By the way, this legislation will increase even more the number of producer cars and that increased use of producer cars will negate the investment, 80 per cent of it by the grain producers themselves.

A majority of producer cars conform to the shipments called for but there have been too darn many which are purposely or accidentally misshipped. The Canadian Wheat Board may call for a specific grade. If a country elevator manager ships No. 2 wheat as No. 1 wheat he is penalized two, three or four cars in the next round of car orders. But producers who ship the wrong grade, even if they do it innocently-there have been too many times when this was not done innocently-receive no penalty at all. Sure, there is the authority if they misship their grain for the whole carload to be returned to the shipper, but it is rarely done. In fact, I have never heard of it ever being done.

When the Canadian Wheat Board embargoed tough and damp grain in the fall of 1985, producer after producer

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bypassed the country elevator system and the Canadian Wheat Board embargo and shipped grain that had a moisture content as high as 20 per cent in producer cars to Thunder Bay or Vancouver. Those are the kind of people who like this legislation. Those are the kind of people the Parliamentary Secretary says are satisfied. I guess they are satisfied.

All these extra costs that are incurred by producer-loaded cars are averaged into railway costs and are paid by all grain shippers in the freight rate. It would be grossly unfair to relieve producer-car shipments of their share of carrying the costs of the country elevator system and not charge them the extra costs that producer cars incur. I do not think anyone can argue with any kind of logic or facts and figures that producer cars do not produce extra costs.

The three wheat pools, the UGG and the National Farmers' Union, five of the major farm organizations in Canada, all oppose the Bill and they all say that the proposed change in Clause 8 is an increased incentive to the use of producer-loaded cars and a much larger percentage of them will be used. This will increase pressure on the rationalization of the country system and an over-all slowdown of the ability to service the export grain market. It would also increase the concerns of producers regarding undue shrinkage of the grain handling and transportation system. The culprit, as those five major farm organizations see it, is Clause 8.

These organizations say, and we agree, that because of the inclusion of Clause 8 in the Bill, and because of the narrow stubbornness of the Government, the Minister and the Parliamentary Secretary, Bill C-92 is bad legislation. On those grounds, they say that they will continue to oppose it. It is contrary to the interests of the vast majority of prairie farmers and, as well, it jeopardizes the orderly marketing system.

I find it incredible-I should not find it incredible. It is not unusual. I have heard the Tories say that they are in favour of the co-operative movement and the wheat pools and they support them and are in favour of orderly marketing. They say they are in favour of the Canadian Wheat Board and that they want to strengthen it. Yet every time they have made a move, they have weakened the Canadian Wheat Board and the orderly marketing system.

Clause 8 flies in the face of the whole principle of orderly marketing and of the existence of the Canadian Wheat Board. That underlying principle is the sharing by all producers, cooperatively, in the benefits and the costs of shipping their grain to market, 80 per cent of which is the export market.

The Tories talk one way and act the other. Over the years, I have heard Tories say what great supporters they are of orderly marketing and the Canadian Wheat Board. Then every year I find that the Tories are criticizing, complaining and legislating to weaken the system that they claim to be such great supporters of.

The fact is that the Tories are pandering to, at best, 3,000 or 4,000 grain producers who belong to the barley, flax and

Lobbyists Registration Act

western wheat growers' associations and a couple or three other little outfits. They are pandering to them out of their narrow market forces, bottom line, private enterprise ideology at the expense of probably 90 per cent of the grain producers of western Canada.

We will be calling on all the farmers we can after this Bill passes, if it does. We will be going to see them by the thousands to show them once again how the struggle by the cooperative movement and by western grain producers through various economic and political actions to get the Canadian Wheat Board strengthened and orderly marketing from being undermined. We can win all the economic battles we like, but they can be done away with or weakened with the stroke of a pen by an unfriendly Government which does not believe in or support what obviously 90 per cent of the grain producers of western Canada want and demand.

This is just an attack on the Canadian Wheat Board and the whole concept of orderly marketing. I for one, and members of my Party as well, will not hold still for it. I know that tens of thousands of grain producers in western Canada will not hold still for it either.

Mr. Deputy Speaker:

Is the House ready for the question?

Question.

Mr. Deputy Speaker:

Is it the pleasure of the House to adopt the motion?

Agreed.

No.

Mr. Deputy Speaker:

All those in favour of the motion will please say yea.

Yea.

Mr. Deputy Speaker:

All those opposed will please say nay.

Nay.

Mr. Deputy Speaker:

In my opinion the yeas have it.

And more than five Members having risen: