Hon. Grant Mitchell:

Honourable senators, it has taken a while to get back to the substance of this matter. That is good, because 60 per cent of farmers would rather that Bill C-18 never pass because we know that it will destroy the Canadian Wheat Board, which statement conjures up the observation that can be made of the government's protestations, and that is that they protest too much.

Much of their argument hinges on the idea that this will be intrinsically positive with no downside because, of course, all farmers should have the right to market their grain and, if the Canadian Wheat Board is as good as everyone says it is, it should be able to compete and of course the Canadian Wheat Board will not die.

However, there is an interesting wrinkle in this legislation that is quite striking and surprising, and that is that the government has reserved the right to appoint the board of directors of the Canadian Wheat Board. That in itself is a step back from the democratic process under which the Wheat Board functioned where two thirds or the majority of the members of the board were elected. Now they will not be elected and one must ask oneself what it is about the new structure of the Canadian Wheat Board that makes the government want so badly to control it that they would give themselves the right in legislation to appoint the board members and the senior staff.

That is an interesting question and it is not rhetorical; I am actually going to answer it.

In addition, why is the government increasing the level of the contingency fund from $60 million to $100 million or more?

You take those two observations together and it comes down to they want to control the Canadian Wheat Board because they want to control that money. As an aside, I should say that money is not the Canadian Wheat Board's money; it is the farmers' money.

This is an expropriation by government. It is a tax on a certain segment of farmers in the population of Canada. It is not a broad tax; it is just a tax on those people. They have had no interest in leaving that money there. It is their money and they should have it.

The third element of this argument that I am developing is this: Why would anyone think that $60 million would be enough to invest, if it were invested in the Canadian Wheat Board, to make that Canadian Wheat Board now, under the new regime, competitive? Clearly, $60 million or $100 million will not buy the port facilities or the grain terminal facilities that would provide sufficient volume for them ever to be able to compete with the Cargills and the Archer Daniels Midlands, who have billions of dollars invested in that infrastructure.

For anyone over there to say that the Canadian Wheat Board will not fail, to make that argument credibly they would have to explain somehow why they need to control the board of the Canadian Wheat Board in order to control the contingency fund of the Canadian Wheat Board, which we know is not enough, even if it were invested, to save the Wheat Board. Clearly, they cannot argue that.

One is left with the thundering conclusion that they want to grab that money because they know it will cost money to wind down the Canadian Wheat Board. They will have to pay out severance packages; they will probably have to pay penalties on contracts; they will probably have to pay out leases. They will have a lot of expenses.

They do not want to use taxpayers' money. They are happy to use farmers' money, but it should go back to the farmer. That asset is being expropriated. This government claims it believes in property rights and freedoms. If farmers are to have the freedom to market their grain, why are they not to have the freedom to get their money back?

Let me put that into perspective, honourable senators. When the Leader of the Government in the Senate and others argue that the Canadian Wheat Board will survive, I have had to use the analogy of the Monty Python story: This parrot is dead; the clerk says, no, it is not. You know what? The clerk in this case is the Leader of the Government in the Senate: This Canadian Wheat Board will not die; it will exist.

The fact of the matter is that if that were true, they would not need to control it. They would not need to grab its money; they would not need that money for the only thing it can possibly be used for, which is to wind down the Canadian Wheat Board and kill it once and for all. It will be at no expense to the taxpayer; just rip off a group of farmers who have made that money and, in that process, some of it is taken off as a contingency. It is not needed as a contingency anymore; it should go back to the farmers.

That is an appalling observation to have to make about a government that claims it has farmers' interests at heart and believes in property rights of individuals and rights of individuals more generally. They have just thrown it in the face of that purported value they hold because their ideology is so driven to get rid of this.

Why will the Wheat Board fail? Why can it not compete? The first reason is that over 50 years, rather than taking the profits it has been able to generate and reinvesting them in terminal facilities or access to railcars or grain terminals, the Canadian Wheat Board has passed that profit along to farmers. While Archer Daniels Midland and others are taking some of their profits — most of which goes to the U.S. or to foreign investors — they are also investing in facilities.

Up to this point, legislation has required that those multinationals provide Canadian Wheat Board grain with priority access to terminal and port facilities. That is gone. If this government were at all serious about the Canadian Wheat Board succeeding, they would also have in that legislation that the Canadian Wheat Board needs access to these facilities. It cannot be at the whim of their competitors that they will now have no protection from. They will have to ask their competitors to give them the facilities that they need to be competitive. That would be like a small cellular company asking a big cellular company if it can use their cellular line facilities to sell telephone time. Those companies would never give that access to the smaller companies, except that legislation requires it.

They will not be able to compete because they will not have access to facilities, except at the whim of their competitors. What competitor the size of Cargill would ever have gotten that big if they were so kind to their competitors? That is one of the major reasons the Canadian Wheat Board will not be able to compete.

The first reason is that they have not taken the money and invested it in capital themselves because they have passed that along to farmers. The second one is that they do not have any legislative access to the facilities they need to compete. Remember that, and remember that is consistent with what this government believes in its heart of hearts it will do, which is to kill the Canadian Wheat Board.

What are the losses at stake here? There is a thing in this business called "tendering and dispatch demurrage." That means that if the grain gets to the ship and the ship is filled with the grain before the deadline, there is a bonus back to the people who have delivered the grain. In the case of the Canadian Wheat Board, they have had the leverage and the power where they could insist that that money be paid to them and, in turn, to the farmer. In 2005-06, that was $23 million. If you break up all of those farmers, they will have no leverage to get that dispatch bonus. That will probably go to the major grain companies or to the railway, but it will not come back to the farmer. The farmer will lose that.

The farmer is also going to lose a great deal of advocacy. There is a huge issue, for example, with respect to allocation of grain cars. There is real tension in trying to get what you need where you need them. However, again, because the Canadian Wheat Board had the leverage to do that, they could fight on behalf of farmers to get grain car allocation. There will be no one there to fight on behalf of farmers to get grain car allocation now. That will be gone.

The Canadian Wheat Board has been a profound advocate in trade disputes — and there have been a number of trade disputes. The U.S. starts them frequently because they see the Canadian Wheat Board as a huge problem for them in trying to compete. They have often taken us to international courts and trade tribunals to try to destroy the Canadian Wheat Board, but they have lost absolutely every one of them over and over again.

It has been proven over and over again that the Canadian Wheat Board is not outside the rules of international trade competitiveness, but it is a significant advantage to us. There will be no one, no group with power and resources, to defend farmers in these kinds of international trade disputes.

In fact, it is very much more likely that there will be more international trade disputes because now you will see that individual Canadian grain truck movements will increase significantly in the open market, as some farmers try to drive their grain down there. They will be seen and be far more evident than they were in the way that the Canadian Wheat Board conducted its transportation of wheat. The result will be that there will be even more trade disputes. This will put more pressure on our farmers and there will be no one there to advocate for them.

There is also the issue of competition in transportation for grain farmers. Right now, there are two major railroads, CN and CP. They do nothing to allow smaller, short-line railways to use their lines. There is basically a duopoly.

Honourable senators, if you look at the difference in quotes and bills for shipping on either line — same amount, same distance, same start and finish — there is pennies' difference. That is because there is no competition. The government has not helped farmers by insisting, as they have with respect to cellular telephones, that other smaller train transporters should be able to use the lines of the two big train companies. They have done nothing to allow that.

In fact, the two big train companies use other lines in the U.S. U.S. railways are required to allow CP and CN to use their lines in the U.S., but this government has never required CN and CP to allow short-line railroad operators to use CP and CN lines.

The Canadian Wheat Board operation has supported the short-line railroads in Canada. That has provided at least some competition. Without the carrying of Canadian Wheat Board wheat, these short-line railroads will be in even greater peril than they have been to this point.

In fact, the major companies, the multinationals, will not use those short-line railroads because they will use their own facilities and railcars, et cetera. We will find that there will be even less competition for farmers in the transportation market.

Now they will have no protection from the Canadian Wheat Board; they will have no advocacy from the Canadian Wheat Board; they will have no market power on their behalf in the Canadian Wheat Board; they will have less competition for transportation because the Canadian Wheat Board is gone. How will that possibly be better for farmers? They will not get the $23 million they got in 2005-06 for the bonus that is paid because they delivered early and got the ships filled early. They will not have any protection from trade onslaughts from the U.S., from trade disputes with the U.S. It is very difficult to understand, therefore, how this could possibly be better for Canadian farmers. It simply will not be better.

How do we know for sure? Why do we not listen the Canadian farmers? When they had the chance to vote on it, on a real straight-up question — no doubt, no trickery — 60 per cent voted for sustaining the single-desk Canadian Wheat Board, but now that will be lost.

The question that we are left with is, how can we explain the government's actions in this way? The only way we can possibly explain their actions is ideology. There is no other explanation. They do not like the idea of having some kind of collective action. They do not mind massive collective action in the sense of duopoly or in the sense of big corporations, but they really do not like collective action on behalf of farmers. To complicate their hypocrisy, we find that they say they believe in democracy. In fact, it was the Reform Conservative Party's origins to say we needed democratic reform. Their version of democratic reform in this case is to deny the act that calls for a clear question and a clear referendum and allows the farmers to make the choice. Their vision of democracy in this case is to deny the 60 per cent result from farmers who voted in their own Canadian Wheat Board-led vote, and their version of democracy now is to take over the Canadian Wheat Board, what is left of it, and appoint the —

The Hon. the Speaker pro tempore: I regret to inform the honourable senator that his 15 minutes are up. Is he asking for more time?

Senator Mitchell: I ask for more time.

The Hon. the Speaker pro tempore: Is more time granted, honourable senators?

Senator Mitchell: Thank you, honourable senators. I got a chink in the armour. Senator Mockler is starting to get that look in his eyes. Just give me another five minutes and I think I can save those farmers.

Let us get to the question of democracy. What is it about this government that it just has to jam things through? For one enlightened, brief second, the house leader did withdraw his closure, showing that he is much more enlightened than his colleagues on the other side, and he should be congratulated for that gutsy move. I hope you are still sitting there tomorrow.

You can get a little bit to the right of Patrick over there; there is a little room to get further away. Anyway, we are hoping that is not the case. We do not want to lose you; you did a great job today, fantastic.

It is one of those issues that are so symbolic and representative of how the government does politics and public policy. They diminish the importance of the result, the objective, which is to, in this case, enhance the livelihood of farmers. They diminish that to their ideology or to some specific set of interests. I do not know exactly why they weigh one group of farmers' interests over another. They say they believe in democracy, but all the evidence is that they simply do not reflect that in their public policy. We are simply saying the farmers should get to decide. Let them decide. The fact is that they say they believe in competition. How will these farmers without the Wheat Board individually be able to compete with, for example, Cargill, which has revenues of $106 billion a year? What kind of leverage does any given farmer have?

The consequence of this is that farmers will be damaged; the family farm in particular will be damaged. Corporate farms might have a better chance to survive, but we will see a massive consolidation of farms. What that will do is further damage rural economies and towns; more will close; they will lose more services; and this we know will be as a result of what has been done to the Canadian Wheat Board.

There is no justification. It is punitive and harmful. It is a point at which ignorance meets ideology, if I can coin that phrase. No good will conceivably come of this initiative. It will only harm farmers.

I was talking earlier today about the government's clear deficit-creation program, and I have about 10 or 15 examples of it that I will get to in the budget debate. I just want to raise this one. One of the key elements of it will be the fact that farmers will need more assistance now, and that will take taxpayers' assistance because they will be damaged by this. I expect that the political pressure will be so great that this government will relinquish and begin to subsidize farmers directly from the taxpayer rather than allowing the farmers to fend for themselves in a collective way, which was what the Canadian Wheat Board allowed them to do over 50 years. This was a great institution. It is a dying institution. I do not have to make that case. The government itself has made that case by now, saying in this legislation that it has to grab the power over the Canadian Wheat Board, it has to grab that money, that farmers' money, expropriate it, tax it, steal it, so that it can use that money to wind down the Canadian Wheat Board. That is exactly what is going to happen. We will probably be talking about that in a year or in 15 months. The Canadian Wheat Board will be gone and it will be a disaster for the farmer. I am very sorry to hear it.

Please click here to read the full text of this debate

Recent Statements from Liberal Senators