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December 15, 2011 - No. 130

Senate Vote on Legislation to Dismantle Wheat Board

Oppose the Harper Dictatorship's Nation-Wrecking!

Oppose the Harper Dictatorship's Nation-Wrecking! - Sandra L. Smith
Where Obeying the Law Is Optional - Canadian Wheat Board Alliance
Board Directors Ask Courts to Halt Federal Bill and Restore Farmers' Right to Vote - Canadian Wheat Board
Windsor and District Labour Council Passes Resolution Against Bill C-18

Senate Committee on Agriculture and Forestry
Young Farmer Explains Importance of Organizing Farmers as a Collective
Explanation How Individual Farmers Are Marginalized in "Free Market"
Wheat Exporters Describe Strength of Public Monopoly and Its Importance for Grain Quality and Economy of Scale
Impact of Wrecking on Producer Cars and Farmer-Run Short Rail Lines
Senators Ask Questions

Senate Vote on Legislation to Dismantle Wheat Board

Oppose the Harper Dictatorship's Nation-Wrecking!

Today, the Harper government has mandated that the Senate vote without fail on Bill C-18, the Marketing Freedom for Grain Farmers Act, whose purpose is to destroy the Canadian Wheat Board (CWB). On December 8, Harper appointee and Deputy Leader of the government in the Senate, Senator Claude Carignan, tabled a motion to limit the Senate's debate on the legislation to no later than 5:30 pm on Thursday December 15 and that "the Senate neither suspend pursuant to rule 13(1) nor adjourn on Thursday, December 15, 2011, until all proceedings relating to Bill C-18 have been completed."

For its part, the Liberal Party sent a letter to Governor General David Johnston urging him to withhold Royal Assent. The December 12 letter from interim Liberal Leader Bob Rae noted the December 7 Federal Court ruling by Justice Douglas Campbell saying the bill is illegal and the government's subsequent decision to file an appeal. Rae's letter stated: "As Leader of the Liberal Party, I would ask most respectfully that full consideration be given to awaiting final disposition of this matter by the courts before the legislation received Royal Assent."

"As the intent of Bill C-18 is inextricably linked to the question of whether the government fulfilled its obligations to consult with affected farmers, it would be entirely within [Johnston's] prerogative to withhold royal assent until the outstanding questions of law and any ongoing court processes were sorted," Rae said in a press release.

Meanwhile, given the refusal of the Harper Government to withdraw Bill C-18, the Canadian Wheat Board has asked the Manitoba Court of Queen's Bench (the highest trial court in the province) to pass an injunction to prohibit Bill C-18 from being implemented. Chair of the Wheat Board Allen Oberg has also written to the Governor General, asking him not to give Royal Assent to the bill because of its illegal nature, the CWB informed.

All of this points to the profound political and constitutional crisis in which Canada is mired and the necessity to provide it with a solution which favours the people. The Harper government is moving fast to bring in all the arrangements which serve the interests of the monopolies and oligopolies it represents. With arrogance, the Harper government is trampling on all previously established codes of conduct and uses its Parliamentary majority and ministerial prerogative powers to go against established notions of accountability and legitimacy.

Canadians are entitled to know what is going on.

The Federal Court has argued eloquently that what the Harper government is up to with Bill C-18 is above the rule of law and it ruled that the manner in which the government has proceeded with this bill is unconstitutional. The Harper government is intent on ignoring this ruling and proceeding with the bill. Minister of Agriculture Gerry Ritz told reporters on December 14, "Well, we fundamentally disagree with the declaration of the court in this particular situation. I can tell you at the end of the day, this [court] declaration will have no effect on continuing to move forward for freedom for western Canadian farmers."

Opponents of the bill, especially the farmers who are directly affected by the adverse consequences of dismantling the Wheat Board, have provided irrefutable proof that the bill is not even factually sound when it claims that it creates choice between the free market and single desk. In the Senate Committee, young farmer Matthew Gehl said it most eloquently when asked by Senator Don Plett of Manitoba whether he had read the bill in its entirety. He answered that "I have not gone through every single line of the bill. [...] The main reason that I feel justified in not having gone through it with a fine-tooth comb is that it is still based on the notion that the Canadian Wheat Board can be viable in a dual market. One thing that all experts on this issue agree on is that there is no such thing as a dual market. For Bill C-18 to be built on the foundation of a viable Canadian Wheat Board without a single desk, the entire bill has no validity as far as I am concerned, when the experts, the agricultural economists, line up and say this cannot happen, and when [former Minister of Agriculture Chuck] Strahl commissions a report that comes to that same conclusion in 2006."

The question on everyone's mind now is whether the Governor General will give the bill Royal Assent and Harper government will get away with this or whether the courts will issue an injunction and, if so, whether the government will abide by it.

On everyone's mind is how to hold the Harper government to account. Most importantly, of course, is the fact that at the end of the day, the role of the Court of Public Opinion is paramount which is why so much effort is made to disinform it, wreck it, so that an effective opposition to the Harper dictatorship cannot be mounted.

All of this raises the fundamental issue facing us at this time. However scores were settled with the old conscience of the societies of the 17th, 18th and 19th centuries, giving rise to the current constitutional and state arrangements, these methods are no longer suitable to settle scores with the old conscience of this society and the problems it engenders. Canadians must forge ahead and fight for political and constitutional renewal so that the state is in their service and their human right to exercise control over all matters which affect their lives is provided with a guarantee. The human and material resources of the societies on which people depend for their living must be put at their disposal, under a decision-making power over which they can exercise control.

At the proceedings of the Senate Committee, Ontario Senator Frank Mahovlich did not mince words when he adamantly stated, "The government is not above the law. Here we have a case where they're above the law. Now if this is the case Adolf Hitler would still be here."

All out to oppose Bill C-18 and other measures the Harper dictatorship is taking which usurp the rights of all. Our Security Lies in Our Fight for the Rights of All! Let us organize to give the Harper dictatorship a resounding No!

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Where Obeying the Law Is Optional

In very blunt language the Honourable Douglas Campbell of the Federal Court has ruled that Minister Ritz has broken the law by introducing legislation to gut our Canadian Wheat Board without consulting the farmer elected Board of Directors and holding a fair plebiscite among farmers.

This means the judge has already ruled Ritz's argument that he is rescinding the law, so he does not have to follow the law, is nonsense. Yet now we have a Prime Minister contending that following the law (i.e.: the ruling of the courts) is optional for his government. The judge called this "an affront to the rule of law," and it is.

This sort of lawlessness on the part of government can only lead to further lawlessness, just as Chief Justice Fraser wrote:

"The detrimental consequences of the executive branch of government defining for itself -- and by itself -- the scope of its lawful power have been revealed, often bloodily, in the tumult of history. When government does not comply with the law, this is not merely non-compliance with a particular law, it is an affront to the rule of law itself."

A decedent, honourable, and law abiding government would simply withdraw this shameful legislation and get on with more pressing issues. At a minimum, it is time for the Senate to table Bill C-18 until the court process is completed.

Certainly the hypocrisy of a tough on crime government ignoring a court ruling should not be lost on even its strongest supporters.

All individual rights to freedom and property are dependent on the rule of law being respected by government. By choosing to ignore the law, Prime Minister Harper has stepped into some very deep water and this is a direct threat to all Canadians.

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Board Directors Ask Courts to Halt Federal Bill and Restore Farmers' Right to Vote

Farmer-elected directors of the Canadian Wheat Board announced today that they have launched legal action to stop implementation of illegal federal legislation, introduced without the approval of the Prairie farmers it affects.

"Farmers were promised by successive federal governments -- including the current Minister and his predecessor -- that any changes to the CWB's marketing mandate would be put to a producer vote, as required by law," CWB chair Allen Oberg said at a news conference today. "The Harper government has reneged on that promise. It is now breaking the law and ignoring an order of the Federal Court. This must stop. We want farmers' democratic rights to be respected and the government to stop acting as if it is above the law."

The CWB will file an application in Manitoba Court of Queen's Bench, asking it to rule Bill C-18 invalid because it violates the rule of law. The CWB is also asking the court to issue an order preventing implementation of Bill C-18 until it makes a decision on the validity of the Bill.

Last week, the Federal Court of Canada ruled that Agriculture Minister Gerry Ritz contravened the law when he caused the Bill to be introduced without first conducting a farmer vote as required by 1998 amendments to the Canadian Wheat Board Act, which were designed to put Prairie farmers in control of their grain marketing organization. Despite this ruling, the government is proceeding with the legislation.

"Such disregard for a court order is virtually unprecedented in Canada," Oberg said. "It is unconscionable for a government in a Parliamentary democracy to proceed with legislation in the face of a court order that has declared it illegal."

Bill C-18, currently before the Senate, would enable the government to dismantle farmers' single-desk marketing system by August 1, 2012. It would also remove all farmer-elected representatives on the CWB's board of directors immediately upon Royal Assent, which could occur by the end of this week.

Oberg has also written to the Governor General of Canada, asking him not to give Royal Assent to the Bill because of its illegal nature, in light of the Federal Court decision.

"I believe it would be an affront to our system of Parliamentary democracy and the rule of law to grant assent to a bill that has been declared in violation of Canadian law," Oberg wrote yesterday to His Excellency David Johnston.

Oberg and other farmer directors were joined at today's news conference by Liberal leader Bob Rae, MP Ralph Goodale, Senator Bob Peterson and representatives of the National Farmers' Union, the CWB Alliance and Friends of the CWB.

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Windsor and District Labour Council
Passes Resolution Against Bill C-18

On December 13, the Windsor and District Labour Council passed a unanimous resolution calling on the Senate not to pass Bill C-18, the Marketing Freedom for Grain Farmers Act. Following its passage the resolution was sent to the clerk of the Senate and the office of Senator Bob Peterson of Saskatchewan. The text of the motion reads:

Resolution to Oppose Bill C-18 -- the Marketing Freedom for Grain Farmers Act

WHEREAS the Canadian Wheat Board (CWB) works in the interests of farmers and the Canadian people because, as the sole marketer of the high quality wheat and barley grown in western Canada, it is able to provide marketing clout to individual farmers who benefit from higher returns;

WHEREAS by selling together, western Canadian farmers can exert more power in the global marketplace than if they were competing against each other;

WHEREAS, by undermining the Canadian Wheat Board's public monopoly, the Harper government is handing over western Canada's grain trade from Canadian farmers to mostly foreign-owned private agri-monopolies such as Cargill and Viterra;

WHEREAS, in putting forward Bill C-18, the Marketing Freedom for Grain Farmers Act, the Harper government is in violation of section 47.1 of the Canada Wheat Board Act that clearly states producers must vote in favour of eliminating or excluding grains from the Wheat Board before that can be done;

WHEREAS in the absence of a government-run vote as required under the the Canada Wheat Board Act, a mail-in plebiscite was held by the Canadian Wheat Board, in which farmers gave clear support to the CWB's public monopoly: Out of a total of 38,261 farmers, 62% voted in favour of maintaining the Canadian Wheat Board's public monopoly on wheat marketing sales and 51% voted in favour of maintaining the CWB's public monopoly on barley;

WHEREAS on December 7, Federal Court Judge Douglas Campbell ruled that the introduction of Bill C-18 did not comply with the law and declared it "an affront to the rule of law";

WHEREAS officials of the Harper government have stated that regardless of the fact that Bill C-18 violates the law, they will not rescind it;

WHEREAS the Harper government must be held to account for its violation of Canadian law;

BE IT RESOLVED That the Windsor and District Labour Council call on the Senate of Canada NOT to pass Bill C-18 on December 15 as currently planned.

BE IT FURTHER RESOLVED That the Windsor and District Labour Council and its affiliates go on record as supporting the Wheat Board and farmers across Canada in their campaign to save the Canadian Wheat Board and defend Canada's food sovereignty.

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Senate Committee on Agriculture and Forestry

Young Farmer Explains Importance of Organizing Farmers as a Collective

Posted below are the individual remarks of Matthew Gehl on December 7 to the Senate Committee studying Bill C-18.


I would like to thank the Standing Senate Committee on Agriculture and Forestry for the opportunity to come and present my case today. Clearly this is an issue that I feel passionately about. I have been in Ottawa for the better part of the last three weeks meeting with a fair number of people around the table. I can say with certainty that I have called all of your offices, probably more than once or twice. I am happy to be here and I will get into it because five minutes will run up quick.

I bring a slightly different approach to this than the gentlemen who are joining me on the panel today, and the other witnesses you have and will hear from over the course of this week.

I am 27 years old. I come from a farm just north of Regina, Saskatchewan. It is my family farm, run by my father and uncle. They are third generation farmers. Farming is the only thing they have every done. Growing up, I never wanted to be a farmer. I had no interest and was encouraged to seek other opportunities. I went to university, finished my degree in political science and history, and found myself working back on the farm.

The call was needed for labour. I figured with a family farm, family comes first. I went back and have been working on the farm for two years. Every day I do it, I love it more. It surprises me that I can call myself a farmer today. For the first time in my life, my father posed the question of whether I would seriously consider taking over the farm. For the 26 and half years previous it had been an instantaneous, "No." For the first time I actually had to stop and say, "I need to seriously consider this." I enjoy it and get to work with my dad on the land. Coming here and seeing this fight farmers have put up against Bill C 18 puts that future into doubt for me. I feel the Canadian Wheat Board gives the average farmer a good, strong hand in a global economy that is controlled by an oligopoly of extremely large and powerful grain trading corporations.

I do not see how one of 70,000 western Canadian farmers will have any clout going up against the likes of Viterra or Parrish & Heimbecker; they are small fries in the global pond. In the world of international grain trading, Cargill is worth more than $100 billion a year. Even the locally grown companies such as Richardson are small fish. Compared to those small companies, my one farm is nothing. We are a speck of dust on their lapel to be brushed aside for the whims of their shareholders. They are there to make money, but that will squeeze us out. This bill removes the marketing clout the farmers have by working together. I have not seen enough over the course of the two or three months this bill has been put before the house that shows this bill has been probably thought through. Farmers have a beneficial ownership. All farmers do. For future farmers like me, that Wheat Board should be there for us to inherent. That is the work that my grandparents and father did to lay the foundation to allow strong, viable, rural farming communities to stand up against the overwhelmingly crushing forces of massive multinational corporations looking to make a profit on the backs of farmers' hard work.

I came here and met with a few of the senators. I have to say my opinion of the Senate was greatly changed. You people do an amazing amount of work that gets almost zero credit in the mainstream media. One thing that is lacking is that the Senate is missing a vital role. John A. Macdonald laid out in the confederacy papers that the Senate has a duty to take bills that have been passed to it by the lower house that are hasty and ill conceived, and send those bills back to the lower house and tell the elected MPs to do their jobs better. The answers given in the house from the opposition's questions of what analysis has been done left so much lacking in terms of analysis. This is too big of a policy change to go on hopes and dreams. By hopes and dreams I mean the voluntary Wheat Board or the dual market.

Minister Strahl commissioned a report in 2006 which said the Canadian Wheat Board will not survive in a voluntary market. I do not see anything that has changed in the last five years which has changed that. We have courts set up to ensure justice is not put into disrepute. I hope that the Senate can seize on the opportunity of Bill C 18 to ensure our democracy, which has been ignored with the government overlooking section 47(1) of the Wheat Board Act. I hope the Senate can send the bill back to the lower house to save our democracy.

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Explanation How Individual Farmers
Are Marginalized in "Free Market"

Posted below is the individual intervention of Saskatchewan farmer Eric Wilmot to the Senate Committee on December 7.


It is an honour and privilege to speak with you this morning. I am a grain and oilseed producer from Carnduff, Saskatchewan in the southeast corner of that province. My two sons have joined me in our 4,200 acre farming operation. I have grown variety of cereal crops including spring wheat, winter wheat, durum wheat, barley and oats, as well as peas, lentils, beans, flax, canola and sunflowers. I have an agricultural diploma and a law degree from the University of Saskatchewan. I have used the Canadian Wheat Board as my agent to market my grain for 38 years.

In addition to my university education, I have taken formal training courses relating to the selling of crops that are not marketed by the Canadian Wheat Board. These courses teach, among other things, the use of the Winnipeg Grain Exchange, as well as U.S. commodity markets such as Minneapolis, Kansas City and Chicago. I have used futures positions and options to hedge prices and/or as risk management for some of my crops, most notably canola and flax. I have also used various pricing and delivery contracts offered by grain companies like Viterra, ADM, Richardson Pioneer, Cargill and Paterson Grain. Each crop has a different market. Some are domestic, some North American and some overseas. The selling expertise required to move further away from home increases. I have sold grains across Western Canada and legally sold wheat, canola and flax into the United States. There is a big difference between selling crops and marketing crops. Marketing includes selling, but it also includes market and customer development, the arrangement of transportation and timing of delivery, after-sales support and branding. The Canadian Wheat Board, with its single desk, is a marketer to customers in over 70 countries around the world. My non-Canadian Wheat Board crops are sold in the open market. I contact grain companies and ask them what the price is at a particular time and location. They tell me the price and the terms of the contract. I have no negotiating power in this arrangement. One of the market analysts that I have used describes this price discovery as buyers wanting to know the least that will persuade farmers to supply the market.

I feel powerless in this arrangement, dealing with international companies that provide me with no disclosure or transparency; I am just a seller, a price taker. I am not a marketer. With the Canadian Wheat Board, I am empowered by its single desk, marketing expertise and farmer elected directors. With the passage of Bill C 18, I will lose this empowerment and the opportunity to market. This will result in a monumental change in how I derive my income. There are very few if any producers in Western Canada who did not start their grain farming careers after the existence of the Canadian Wheat Board.

Notwithstanding that the Wheat Board existed, we all decided to make grain farming our careers. Even those who now oppose the Canadian Wheat Board and its single desk still chose to enter farming.

Unfortunately, the single desk system cannot continue in a market choice or open market system. Any board would have no security of supply that would allow it to confidently enter contracts. As well, a non-single desk board would be trying to sell the same products as other competitors, without primary handling facilities or port facilities. They would be relying on their competition for these services.

I have no problem with people working toward change. However, I do have a problem with a minority of farmers taking away the marketing system that the majority prefers. The only fair way to decide is to let the producers involved in the wheat and barley industry have a vote on what could lead to a fundamental change in their marketing system.

My concerns are with a government that is prepared to use its majority position to change the Canadian Wheat Board Act so that no producer vote is necessary in order to make changes to the Canadian Wheat Board, rather than to give producers a vote on the future of the Canadian Wheat Board, as required under the present act.

Such actions give the appearance that the government is using its majority position to circumvent the democratic wishes of the producers. Any suggestion that a general election is vote enough is not a fair assessment of the situation.

I am advised that if every single Canadian Wheat Board permit holder voted in the last federal election, they would have counted for little more than 2 per cent of the ballots. Only by having a producer vote on the future of the Canadian Wheat Board would it be possible to determine what the majority of producers want. If the result is that the majority want to sell their wheat and barley without the use of Canadian Wheat Board then that is what should happen. However, to allow a minority of producers to have market choice, even though they began as producers knowing that the single desk was the marketing system for wheat and barley, would deny the majority their market choice, namely the single desk system under the Canadian Wheat Board.

The results of the recent Canadian Wheat Board plebiscite indicate that a majority of producers prefer the desk. If that number is not correct, at least there is a significant number who do. What would be wrong with conducting a vote pursuant to the current legislation? Anti-Wheat Board people suggest that farmers in Western Canada should not be treated any differently from farmers in other parts of Canada relating to the selling of wheat. However the producers of Ontario and Quebec were allowed to vote to decide if they wanted a wheat board. It was not decided on their behalf by a federal government without direct contribution or a vote.

There has never been any analysis conducted as to the effects of this monumental change in the $108 billion a year Canadian industry. The government has not provided producers like me with any comfort or information as to the overall effects of this legislation. I feel as though the marketing choice of the majority of producers is being ripped away. We have had no input or explanation as to what will replace it, except that the market will look after it.

I also feel insulted that some of the ministers of the present government belittle my honestly and, I believe, reasonably held position on this issue.

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Wheat Exporters Describe Strength of Public Monopoly and Its Importance for Grain Quality and
Economy of Scale

Posted below is a December 7 exchange between representatives of the Agro-Hall shipping company and Senator Bob Peterson at the Senate Committee.


Senator Bob Peterson (Saskatchewan): To the gentleman from Agro-Hall, I take it you sell into a niche market. How much product do you sell annually? What is the magnitude of your operation?

Erwan Boubet (President, Agro-Hall): Between 800,000 and 1 million tonnes.

Senator Peterson: You do this marketing yourself through your customers, is that right?

Pat Nolan (Senior Export Manager, Agro-Hall): Correct. We purchase the grain from the Canadian Wheat Board against inquiries from our clients overseas.

Senator Peterson: To guarantee that delivery, do you have to have it at the port? You do not have facilities.

Mr. Nolan: No, we buy the grain from the Canadian Wheat Board FOB [Free-On-Board] St. Lawrence River or FOB Churchill or FOB West Coast.[1]

Senator Peterson: In order for you to sell to your clients, you need the assurance you can have that delivery.

Mr. Nolan: Correct. Our clients buy as necessary. When we have to buy grain for a period, say July 1, 2015, that grain has to be in position at the elevator. The ship has to be there, which is our responsibility. It is the board's or the supplier's responsibility to get the grain to the port for that date. We have to load the ship and get out and sail in a timely fashion to meet an arrival in West Africa; and we have to go to four or five countries to discharge, so it is a real grocery ship. We have to be there on time. Otherwise, we run the risk of the elevators, the millers, running out of grain, in which case they will either shut down or look for an alternative source of product.

We do not want them to do that. Canadian grain is the most reliable, consistent grain in the world. As we have heard earlier today and will probably hear more as we go on, the quality is top quality. This is why we are renowned; Japan knows it, as does Iran, Iraq and Algeria -- any country that has brought our tendered grain. Russia many years ago, through Export Club, Cuba with Alimport, they all know that the Canadian grain is top quality. Of course, Russia has become our main competitor now. When you help someone too much, that is what happens, but we have a history. People want our grain and are willing to pay for it because they know they will get exactly what they are looking for all the time.

Senator Peterson: As you have indicated with this voluntary board, it needs regulatory access to rail and loading facilities. If that was to fail and does not work, have you any other way of staying in business?

Mr. Nolan: There is always the option to purchase from any of the grain companies that would be in business as of August 1, 2012 -- the Viterras, the Cargills, the Dreyfuses. However, they do not have the vast space to draw from, as the Wheat Board does now. The Wheat Board draws from across Western Canada, from Alberta to the borders of Manitoba and Ontario.

If we are dealing with a grain company like Viterra, Dreyfus, Cargill or any grain company you want to name -- Richardson, Patterson -- they will have vastly smaller areas to draw from. Therefore, their sourcing may be limited and it might be harder for them to source, logistically move or position the grain, whereas if we run out of grain in Saskatchewan in certain parts, the Wheat Board will draw from Alberta or from Manitoba. They have many more opportunities to source product. The smaller grain companies are still big. Viterra and Cargill are huge by any measure, but they do not have the same resources the board does. The board has no farms or inland terminals. They have a limited number of rail cars, two lakers pending, I believe, and they have an office building. Their assets are their people, yes, and they have very good staff at the Canadian Wheat Board. They are very cooperative and friendly and are always willing to listen and work with people, as I am sure all the grain companies are.

However, assets only go so far. The other grain companies currently do not have to market to sustain themselves. They just sell their product, basically Wheat Board grain I am not talking about non-Board grains to the Wheat Board and are guaranteed their money. If the Wheat Board becomes a competitor, it is a whole new ball game. The mentality may be, "Why should we help the new kid on the block? What is in it for us?" The Wheat Board will have to have some space, otherwise, if we choose to buy from the board and we say we want 30,000 tonnes on June 15, the board will have to try to find someone who will take it. If they do not take it, they will come back and say they cannot get it, and we will try from someone else. We may have to look at other origins, and we do not want to do that. We want to stay Canadian. We have shipped 100 per cent Canadian grain for the last 25 years. We have a track record of supporting Canada any way we can. We have even shipped non-Board grains when we have had to; feed peas, feed wheat and barley. We have done a lot of items.


1. Most of Canada's grain is marketed on a Free-On-Board (FOB)-port basis, i.e. the purchaser arranges and pays for the insurance and freight charges. Shipping costs are important since they affect the landed grain price. (www.transportdugrain.ca)

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Impact of Wrecking on Producer Cars and
Farmer-Run Short Rail Lines

Red Coat Road and Rail Line, Saskatchewan

Posted below is the December 7 presentation of Lonny McKague, Director, Red Coat Road and Rail, a farmer-run short rail line in Saskatchewan, to the Senate Committee.


Good afternoon, honourable senators, it is an honour to be here today to speak before you for two reasons. The first is that I represent a group of people who are very average Saskatchewan, rural residents and who have done extraordinary things in their lives.

These people that I have surrounded myself with are local community people, in southern Saskatchewan, who have achieved some things and have a winning record that shoots above the belt of Ogema, Saskatchewan, Pangman, Saskatchewan, Viceroy, Saskatchewan and even Saskatchewan itself. Almost 13 years ago, we entered into negotiations with Canadian Pacific Railway to purchase a rail line, 114 kilometres long, from the town of Pangman, almost to the town of Assiniboia. At that time, there was one other short line in Saskatchewan, but there had never been a short line rail line bought. The odds were stacked against us to say the least. We found that Canadian Pacific Railway followed the act to the letter. They were extremely good negotiators, from their point of view, but they were also fair negotiators because of the act. We thank them for that. We were able to purchase our rail line after 18 months of negotiations, and we have operated it ever since. The purchase price was just over $1 million for the rail line. It was hard to come up with that $1 million because my community has fewer than 400 people. We had to come up with some funding to purchase the rail line. We had to explain it to financial organizations and government. We were the first people on the block. We had provincial, federal and municipal governments and the banks learning from our experiences as we went along. The learning curve was extreme but we were happy to lead because the result would have been that within weeks our rail line would have been ripped up, sold off and maybe rebuilt in Mexico or the United States or salvaged for iron.

Since that time, our rail line has been successful. We have operated. We have facilities along the line with full time staff. Facilities that are farmer operated have been put up. We have put in railway sidings at some locations at the request of farmers. Our business plan, I would say, is 100 per cent but probably 99.5 per cent producer cars that are Board grains. We do not find, in the non board market, that the elevator companies are interested in using us because to retain the profits of a producer car, we have to cut out the middle man, which is the grain elevator company. That is where the income for producer cars lies and where the benefit lies to producers.

In the last 10 to 11 years, we have retained around $3.5 million to $4 million in savings to our local farmers. We have paid just above $400,000 in municipal and education taxes to our local rural municipalities. We have retained businesses within the towns, and we have established a success story that others have now duplicated and followed. I am very proud of the people that started this railway line and that went through the problems in order to bring it to where it is today.

As of September 1, we were able to pay off our original mortgage and have some money in the bank. Of course, with the floods this spring and the disastrous weather that you all heard about in the news in southern Manitoba and Saskatchewan, we had huge rail bed issues. We were putting new dirt and berms into places that had never had berms before, even in the seven years prior when it was owned by CP Rail. We have had extensive costs such that we are in the neighbourhood of $400,000 in dirt moving this past summer to put the track back into operations. It has been a significant amount of cash, but we are hoping this is a once in a lifetime issue and we have been successful.

However, our success is contingent on producer cars. The open market system right now does not utilize producer cars and, in fact, works very, very hard against producer cars; but I am not sure why. I do not have the reasons. The grain companies have their best interests of their shareholders at heart and the best interests of their shareholders are not producer cars. We keep their tariff rates down. We are their competition. Do they want us to exist? I do not believe so.

With that, I will be happy to answer any questions that the committee has. Again, the second reason that I am here, and it is such an honour to be here, is to be before the Senate. In rural Saskatchewan, all jokes aside, it is a little hard to explain and be politically correct. The Senate does not carry a huge emphasis with some people, whether politically left-, right- or centre-leaning. However, with me, you do carry emphasis. The sober second thought of the Senate has always been very valuable. I respect it and am honoured to be here before you for that reason.


We are 100 per cent reliant on grain movement as of right now to pay our bills. Almost all of those cars, if not all of them, are Canadian Wheat Board cars to this date, and most of them are producer cars. Without those cars come August 1, we have capital bills to be paid at the start of our fiscal year that we need to pay.

If the producer cars do not continue, I will use the example of when we went for loans to a federal government financial institution. They told us, as a group of four people sitting there in their office -- this was the president of the federal financial institution -- that we were going against the wave of the future when we bought our short line rail lines.

We took that to heart. We were back the next week again and we were a little more prepared. They retracted that statement, and they assisted us in some research money to get started and some start up money, but we were not able to get a loan.

We were right; we were the wave of the future. They were wrong; they were not. Producer cars have caught on. There were over 11,000 producer cars moved last year, compared to 10 years ago. We hope we are wrong this time, senator, but our foresight -- that same foresight that we had 11 years ago when we started this -- says we cannot see how producer cars will continue because their only value is reducing the middleman. If the Canadian Wheat Board -- who did not give us special treatment in any way, shape or form, but gave us equal treatment to the grain companies -- is taken out of the picture, we do not believe the grain companies will have our best interests at heart.

In fact, they have already started targeting our producers along the line. It has already begun because as grain companies try to get market share, the first people they are going after are producer car shippers. That is the easiest target and it has already begun.

Why do I believe that we will not succeed? I believe there is a group out there that does not want us to succeed; and if producer cars are there in legislation but not there in practicality, we will fail. That failure will amount to no financial return for us immediately, starting within months after August 1, 2012.

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Senators Ask Questions

Posted below is an exchange between Senators and farmers participating in the December 7 meeting of the Senate Committee studying Bill C-18.


Senator Don Plett (Manitoba): I have a list of questions. Obviously, I will not get to all of them -- at least, not in the first round -- but I will ask a few.

First, gentlemen, thank you for taking the time to come to Ottawa and explain your position. It is certainly appreciated. I for one and all of my colleagues appreciate hearing all sides of this issue. Mr. Gehl has been in my office and we had a good chat there. That was certainly appreciated. On that note, Mr. Gehl, as an aside, since you were in my office, have you read the bill in its entirety? You had not done so when you were there.

Matthew Gehl: I have not gone through every single line of the bill. In my defence, I am not a professional politician; I am not a policymaker. If I could get parts of your salaries, I would be more than happy to sit and read through any bill you have for me. The main reason that I feel justified in not having gone through it with a fine-tooth comb is that it is still based on the notion that the Canadian Wheat Board can be viable in a dual market. One thing that all experts on this issue agree on is that there is no such thing as a dual market. For Bill C-18 to be built on the foundation of a viable Canadian Wheat Board without a single desk, the entire bill has no validity as far as I am concerned, when the experts, the agricultural economists, line up and say this cannot happen, and when Minister Strahl commissions a report that comes to that same conclusion in 2006.

Senator Plett: My question was whether you had read the bill, not your opinion of it, but thank you for the answer. I am from Manitoba. I am not a farmer but all my life my livelihood and my sons now have been dependent on the farming community. I feel very close to it. We have worked with farmers all our lives in our business, and co-ops and pools are very popular. You gentlemen are all from Saskatchewan where there is a very successful pool called North West Terminal. Do any of you market any of your product with North West Terminal?

Gilbert Ferré: No, because of the distances involved. I am over 300 miles from them.

Senator Plett: Do you market with any other pool?

Gilbert Ferré: Do you have any idea what it costs to transport grain any distance with a semi? It is unreasonable to expect anyone to buy a semi or even rent or hire someone to transport your production off your farm with the kind of distances you are talking about.

Senator Plett: Sir...

Gilbert Ferré: Let me finish, please. The distances we have to deal with in the province as a result of rail line abandonment, the closure of elevators and so on has brought us to this point. I consider myself a small farmer, with less than 3,000 acres. I have my 1E licence and I drive a semi. I bring my grain in large volumes to the elevator because that is the only way to be cost effective with the distances we have to travel. Second, on that point, as a result of those rail line closures and the elevators being pushed over, the roads are taking a beating and the taxpayers of the province are picking up the tab for that.

Senator Plett: If I could, please, Mr. Chair, in light of time, when I ask a question, I really want the questions answered.

Senator Frank Mahovlich (Ontario): Point of order.

The Chair: One minute, please, Senator Plett. Thank you for the comment. I will hear Senator Mahovlich on a point of order. Would you please state your point of order?

Senator Mahovlich: These gentlemen come from Western Canada. You have no idea of the distance. They have offered their time and money to have a say in this democracy. Let them speak and give them more than five minutes.

The Chair: Thank you for the comment, Senator Mahovlich. It was not a point of order. Please continue, Senator Plett, and then we will move to Senator Peterson.

Senator Plett: Do any of you operate with any other voluntary pool or co op? I understand North West Terminal is too far away from you, sir, but there are others.

Eric Wilmot: For the same reason, any of the producer owned inland terminals are too far away from me. In fact, I find myself almost trapped to one elevator because of distance. If their prices are not fair, I cannot necessarily go shopping around because as soon as I do, the transportation costs make it not feasible.

Senator Plett: I will lump my last two questions very quickly into one. There was a plebiscite done and you of course are of the opinion that there were certain percentages and that should be respected and so on. You say the majority of the farmers in Western Canada voted 62 and 51 per cent respectively for wheat and barley. I talked to the Wheat Board directly and I asked them whether there were province by province results, because I was interested in how my province had voted in this. It is sad to say there were not province by province results. I will make this my last question. If the province of Manitoba wants to sell on the open market, and Alberta, Saskatchewan and the northern part of British Columbia do not, should Manitoba farmers not be allowed to sell in the open market? Why should they be subject to the same wishes that Saskatchewan and Alberta farmers have? The second part of the question is, you have been very clear on your feelings about democracy and I think we agree with that. If even one farmer wants to sell his grain on the open market, why should he be subjected to the wishes of other farmers where it would be his risk to take to sell on the open market? I know you cannot all answer the question, but one or two of you can take a shot at the province by province question and the democratic right of one farmer.

Matthew Gehl: I will take the opportunity to answer. The province by province situation is making us out to be more of a republic than the confederation we currently are. The provinces do not hold that much power as the states do in the United States of America where different provinces can have completely different laws. This is a federal issue and that is why there is a federal mandate for it. Personally, I feel that the Wheat Board should be rolled out across the entire country, but that is because I believe in it. To answer your second question, democracy does not guarantee the absolute rights of every single person. There is a social contract involved in democracy. Liberty -- and I see you shaking your head -- may invoke absolute freedom for each person, but in a democracy it is the majority. I did not vote for our current Prime Minister, but he is still my Prime Minister, whether I like it or not. Should my wishes as one person not get the same credence you are giving to the grain farmers in your anecdote? I do not think you would agree with that, and that is why I do not think that is a valid point. If the majority of farmers want it under a democracy, it is the minority's opportunity to use the channels that are there to try to make the changes. Those channels are there. Those are the Wheat Board director elections, which have now been scrapped under this bill making the Wheat Board a Crown corporation in all but name. Those people have their opportunities, with five director elections every two years, and since the Wheat Board has been democratized it has been strongly vocal pro-single desk candidates winning 80 per cent of the seats. The one seat that was not won last time was won by 32 votes.

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