MINUTES OF THE WHEAT COMMITTEE OF CABINET MEETING

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"held in
Honourable Jas. A. MacKinnon's Office
on
Thursday, May 2, 1946, at 5:00 p.m.

PRESENT:

Honourable Jas. MacKinnon (Chairman)
Honourable J.G. Gardner

Mr. M.W.MacKenzie
Mr.G.H.McIvor
Mr.C.E.Huntting

Mr.W.O.McNamara
Dr.T.W.Grindley
Dr. C. F. Wilson
Mr.J.B.Lawrie"

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I will quote the minutes fom this meeting in 1946, so you can judge for yourelf, what transpired.

I will try to be as accurate as I possibly can be, although a few initials etc. were copied, and they were a bit blurred through no fault of my own.

Parsley

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"1. Contract with United Kingdom

Mr.McKinnon opened the meeting and read proposals put forward by United Kingdom officials to Mr. McIvor during his recent trip to London.

Mr. Gardner explained the basis of the discussions held when he was in the United Kingdom, with particular reference to the amount of wheat involved and the price. He felt that 160 million bushels should be the minimum but when negotiations were commenced Canada should suggest 180 million bushels.

Mr. MacKinnon referred to the letter which he had received from Mr. McIvor containing the Wheat Board's views on the current wheat price. As Mr. Gardiner had not had an opportunity to read this letter it was suggested by Mr. MacKinnon that the meeting adjourn.

Meeting adjourned until 9 p.m."

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Parsley's note:

I think this is the Mr. Gardiner that the NDP government tried to unfairly and improperly portray as a man of drink in the film Saskatchean's socialist government made a few years ago. They were told to revise the contents, but I do not know if the revision took place.

Moving forward......

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"Mr. Mackinnon continued the discussion on the proposed contract. The proposal by United Kingdom officials had been that the $1.55 basis be maintained until July 31, 1946.

The Wheat Board had compiled a document giving their observations on the proposed contract which had been studied.

Mr. Gardiner was of the opinion that discussions wuth Sir Andrew Jones(?blurry) be opened at once.

He reviewed the main ponts of his discussions in the United Kingdom and agreed that the most recent proposals were quite unacceptable and would not meet with the approval of Western farmers.

The contract would provide for part to be in flour to the extent of 6-7% of the United Kingdom's flour requirements, including that portion milled domestically in the United Kingdom. He would have to check this as he was quoting from memory."

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"Mr. Hunting observed that the United Kingdom proposal was for the $1.55 price to remain in effect until July 31, 1948.

The Board believed this should be effective until July 31, 1949 to compensate the wheat producers for past and present export prices.

Mr. Gardiner pointed out that the wheat producers desire was for stability.

If a contract were negotiated for a five-year period, the first three years price set at $1,55 and the remaining not below $1.00 per bushel, the possibility of averaging a fixed initial payment of say $1.35 over the entire life of the contract would be advisable. Any surplus at the one end would be distributed to the holders of the participation certificates."

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"The wheat imports of the United Kingdom, Continental Europe, the Orient and other importing countries over the past 13 years were discussed at some length.

It was agreed that contracts with countries that normally import wheat from Canada would be desirable. A two-price policy would not be satisfactory and would complicate Canada's wheat marketing problem."


Mr. MacKenzie pointed out the dangers of marketing Canada's wheat surplus in a limited number of countries.This would have the effect of contracting trade. If the price of wheat fell below the contract price he felt that difficulties would be experienced in enforcing the contracts.

Furthermore Canada should not be placed in the position of having to deny wheat to countries that had not entered into a contract."

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Mr. McKinnon said that trade exchange was, in some cases, the reason why some countries imported Canadian wheat.

Dr. Wilson mentioned the need of broad wheat exports to provide a sustaining cargo for Canadian shipping.

Mr. MacKenzie when questioned by Mr. McKinnon was of the opinion that trade with the Orient would expand.

Mr. Gardiner thought that the post-war exports to the Orient, as suggested by the Wheat Board, were too low.

Mr. McIvor pointed out that Australia had been a pre-war exporter to some of the markets in the Orient,particularly China."

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"It was finally agreed that the United Kingdom, through Sir Andrew Jones, should be advised at once that Canada was prepared to proceed to negotiate a five-year contract on the basis of $1.55 per bushel No.1 Northern for the crop years 1946-47, 1047-48, and 1948-49; not less than $1.00 per bushel for 1949-50 and 1950-51 with the actual price to be determined a year in advance.

The quantity involved would be 180 million bushels per year , a stated percentage to be in flour, the actual amount to be subject to negotiation.

The Wheat Board officials were instructed to proceed along those lines."

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"2. Wheat Board Powers

Mr. McNamara raised the question of the Wheat Board's authority to operate in the event of a contract being entered into.

Mr. Gardiner suggested that food contracts requiring special legislation could be expected to get the consent of Parliament.

A letter form the Department of Justice to the Wheat Board was read, suggesting legislation necessary for continuance of theWheat Board powers after July 31, 1946.

This suggested providing adequate legislation by enacting Western grain Regulations amendments as deeemd necessary, to expire July 31, 1947.

It was agreed, however, that the authority for continuing the present Wheat Board powers would be derived from an amendment to the National Emergency Powers Act rather than by amendment to the Canadian Wheat Board Act."


Parsley's Note: Selling grain had been operating under the War Measure's Act during wartime.

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... to be continued

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"3. Wheat Price Question

Mr. Huntting brought to the attention of the Committee the question of wheat prices and the Wheat Board's views covered in Mr. McIvor's letter to Mr. McKinnon of May 1, 1946.

Mr. McIvor was of the opinion that the situation should be clarified as the present effect upon deliveries was detrimental.

Mr. Gardiner suggested that an increase in the domestic price to $1.55 would meet the demand for an increase in wheat prices.

The proposed contract with the United Kingdom would answer this question and indicated the need for negotiations to be proceeded with at once.

A general discussion followed embracing such topics as the position of the Winnipeg Commodity exchange, the cost of using the present system,"

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not complete

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One line is missing a sentence and should read ( too late!):

"Mr. Huntting brought to the attention of the Committee the question of wheat prices and the Wheat Board's views covered in Mr. McIvor's letter to Mr. McKinnon of May 1, 1946. The recent increase in machinery prices has brought the question of an increased wheat price to the fore."

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Discuss if you want

[wd9]

Parsley, any idea of total Canadian wheat production in 1946?