February 15, 2011
The Honourable Gerry Ritz
Minister of Agriculture and Agri-Food
House of Commons
Ottawa, ON
K1A 0A6
Dear Minister Ritz,
We are writing to you concerning the Canadian Wheat Board’s announcement on February 8 that it plans to purchase two lake vessels for a cost of $65 million.
The Wheat Growers strongly object to this planned purchase. We believe such a purchase goes well beyond the CWB’s marketing mandate. As you know, the mandate of the CWB is set out in section 5 of the Canadian Wheat Board Act which states that the CWB “is incorporated with the object of marketing in an orderly manner, in interprovincial and export trade, grain grown in Canada.” The speculative purchase of ships falls well outside this mandate, particularly when you consider that the ships will often be used to haul commodities other than grain.
We further note that the CWB plans to pay for the purchase by deducting approximately $1 per tonne for four years from money that would otherwise be payable to producers. In essence, the CWB board of directors is confiscating money that belongs to producers – money that is effectively held in trust by them – so as to engage in this speculative venture. Regardless of the merits of the business case, we consider this to be an abuse of their fiduciary duty to farmers.
Even the CWB itself claims that it “returns all revenue, less marketing costs, to farmers”. The purchase of lake vessels, and the contracting of them to a vessel management company can hardly be construed as a grain marketing cost, especially when these vessels will be part of a pooled fleet under the control and direction of Seaway Marine Transport.
Instead of purchasing ships, we maintain that many farmers would rather invest this money in their own farms, their own families or their own communities. The CWB directors should not be permitted to simply “help themselves to other people’s money” to acquire ships or any other capital asset.
If the CWB were voluntary, then we would not object to the purchase of assets, because farmers who did not wish to finance the cost of such assets would be free to take their business elsewhere. However, given the compulsory nature of the CWB, prairie farmers will have little choice but to pay for these ships unless you take action to either stop the transaction or provide farmers with the ability to opt out of the purchase.
Accordingly, we ask you to take one of two measures:
1) Use your authority under section 18 of the CWB Act to direct the CWB to not proceed with this purchase. As you are aware, the Federal Court of Appeal decision in June 2009 confirmed that the government’s “power to direct extends to the full range of activity which the Act authorizes the Wheat Board to conduct”. It is clear that you could overturn this decision if you so wish.
2) Use your authority under section 18 to direct the CWB to allow any farmer to “opt out” of this purchase and receive all monies that they would otherwise be due if it were not for this purchase.
While either of these measures would be acceptable, we have a slight preference for option two, as it would avoid any penalties that might be payable for cancelling the purchase agreement.
Thank you for your consideration of our request. We look forward to your positive reply.
Sincerely,
Kevin Bender
President
c. The Right Honourable Stephen Harper, Prime Minister of Canada
David Anderson, Parliamentary Secretary to the Minister of Natural Resources and for the Canadian Wheat Board
The Honourable Gerry Ritz
Minister of Agriculture and Agri-Food
House of Commons
Ottawa, ON
K1A 0A6
Dear Minister Ritz,
We are writing to you concerning the Canadian Wheat Board’s announcement on February 8 that it plans to purchase two lake vessels for a cost of $65 million.
The Wheat Growers strongly object to this planned purchase. We believe such a purchase goes well beyond the CWB’s marketing mandate. As you know, the mandate of the CWB is set out in section 5 of the Canadian Wheat Board Act which states that the CWB “is incorporated with the object of marketing in an orderly manner, in interprovincial and export trade, grain grown in Canada.” The speculative purchase of ships falls well outside this mandate, particularly when you consider that the ships will often be used to haul commodities other than grain.
We further note that the CWB plans to pay for the purchase by deducting approximately $1 per tonne for four years from money that would otherwise be payable to producers. In essence, the CWB board of directors is confiscating money that belongs to producers – money that is effectively held in trust by them – so as to engage in this speculative venture. Regardless of the merits of the business case, we consider this to be an abuse of their fiduciary duty to farmers.
Even the CWB itself claims that it “returns all revenue, less marketing costs, to farmers”. The purchase of lake vessels, and the contracting of them to a vessel management company can hardly be construed as a grain marketing cost, especially when these vessels will be part of a pooled fleet under the control and direction of Seaway Marine Transport.
Instead of purchasing ships, we maintain that many farmers would rather invest this money in their own farms, their own families or their own communities. The CWB directors should not be permitted to simply “help themselves to other people’s money” to acquire ships or any other capital asset.
If the CWB were voluntary, then we would not object to the purchase of assets, because farmers who did not wish to finance the cost of such assets would be free to take their business elsewhere. However, given the compulsory nature of the CWB, prairie farmers will have little choice but to pay for these ships unless you take action to either stop the transaction or provide farmers with the ability to opt out of the purchase.
Accordingly, we ask you to take one of two measures:
1) Use your authority under section 18 of the CWB Act to direct the CWB to not proceed with this purchase. As you are aware, the Federal Court of Appeal decision in June 2009 confirmed that the government’s “power to direct extends to the full range of activity which the Act authorizes the Wheat Board to conduct”. It is clear that you could overturn this decision if you so wish.
2) Use your authority under section 18 to direct the CWB to allow any farmer to “opt out” of this purchase and receive all monies that they would otherwise be due if it were not for this purchase.
While either of these measures would be acceptable, we have a slight preference for option two, as it would avoid any penalties that might be payable for cancelling the purchase agreement.
Thank you for your consideration of our request. We look forward to your positive reply.
Sincerely,
Kevin Bender
President
c. The Right Honourable Stephen Harper, Prime Minister of Canada
David Anderson, Parliamentary Secretary to the Minister of Natural Resources and for the Canadian Wheat Board
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