REGINA – Saskatchewan’s proposal to save the Crow rail subsidy by applying it to domestic as well as export grain shipments simply won’t fly, says federal agriculture minister Ralph Goodale.
Under the new world trade agreement, Crow payments to the railways on grain shipped to the West Coast and Churchill are considered export subsidies. Federal officials say Canada must either change the method of payment to make it GATT-friendly or see it cut back beginning next year in order to meet the new rules.
The Saskatchewan government says the Crow subsidy could be paid on domestic grain going west (as is already the case for Thunder Bay), making it an internal support and subject to different rules.
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federal government proposed several months ago to increase the compensation rate from 80 to 90 per cent and double the maximum payment from $3 million to $6 million
But speaking to delegates attending the annual meeting of Saskatchewan Wheat Pool last week, Goodale laid that proposal to rest saying the GATT states that export subsidies can’t be used to circumvent countries’ commitments to reduce those subsidies.
“This (proposal) is clearly and admittedly an attempt at circumvention,” he said, predicting that the United States and European Union would “most certainly complain and probably win.”
Canada must live by rules
He said Canada can’t expect other exporters to reduce their subsidies if it is not prepared to live by the same rules.
In a question period later, pool delegate Thaddeus Trefiak of Leross said the federal government is largely responsible for the Crow being labeled as an export subsidy by “flagging” it as a transportation subsidy during the GATT talks.
“The U.S. didn’t flag its transportation subsidies on the Mississippi and they got away with it,” he said.
