Quebec farmers opposed to direct subsidies for prairie farmers almost killed Liberal government plans to kill the Crow rate transportation subsidy a quarter century ago.
But a Parliament Hill lobby by a coalition of Canada’s most powerful business leaders, secretly encouraged and orchestrated by senior Transport Canada officials, ultimately gave the Liberal government its victory in 1983.
These are among the revelations in a new book by one of the key players in the story of the death of the statutory grain freight rate – the late Arthur Kroeger, deputy transport minister at the time.
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Retiring the Crow Rate, largely finished before he died last year and published this summer by University of Alberta Press, offers an insider’s account of one of the most divisive, politically charged and far-reaching agriculture policy decisions in recent Canadian political history.
Kroeger, an Alberta native who became a powerful Ottawa bureau
newscrat, was at the centre of the campaign to end the Crow.
Analysts remain divided over whether the end of the frozen grain freight rate helped diversify the prairie economy or simply took hundreds of millions of dollars off the farm bottom line.
By Kroeger’s account, the killing of the Crow almost didn’t happen.
In early 1983, after more than two years of interdepartmental warfare, a divided cabinet, growing grain farmer opposition, shifting allegiances, setbacks and advances, opposition obstruction and a growing weariness within the government of Pierre Trudeau over the enduring controversy, the idea seemed dead.
Key was an uprising by Quebec farm groups against the government proposal to pay the Crow Benefit directly to prairie farmers. They convinced almost all the 74 Quebec Liberal MPs that it would give prairie farmers an unfair advantage.
The prairie wheat pools, in a move much criticized for encouraging Quebec to influence prairie policy, helped fan the Quebec anger. They wanted the Crow Benefit paid to the railways to keep freight rates lower.
Cabinet agreed to change the regime in the face of the Quebec uprising, driving away the government’s remaining prairie allies.
Kroeger says the Quebec analysis was wrong and the government knew, but opted to chase Quebec votes.
“So far as we were concerned, the cabinet’s decision was a clear case of politicians knowing the better and choosing the worse,” he wrote. “The evidence suggests that we could have overcome the Pools’ opposition had producer payments remained a purely western issue.”
With growing government frustration at the opposition, Kroeger and transport minister Jean-Luc Pepin had concluded by late May 1983 that the attempt to kill the Crow would die. They began to talk about the fight in the past tense.
But a bold gamble by the deputy transport minister saved the day for the government plan.
In an unusual move and with the support of his minister, Kroeger encouraged a group of non-agricultural business leaders with an interest in seeing more railway investment to lobby the politicians. It was a way to counter the arguments of the agricultural opponents.
Kroeger is circumspect about his role but he reports that on May 20, he met with Tom Burns, president of the Canadian Exporters’ Association, presumably to appeal for this powerful business group to try to stiffen the government’s backbone. Burns agreed to mount a lobby.
When a delegation of 14 big business representatives arrived in Ottawa days later, Kroeger briefed them privately and then sent them off to meet with MPs from all the parties – MPs who presumably did not know this was a group largely acting as an agent for Transport Canada that was losing the internal battle.
He said the big business lobby was a turning point that helped strengthen Liberal resolve and reduce Progressive Conservative obstruction.
The farm lobby, most directly affected by the change, had been trumped.
By Kroeger’s account, the Liberal government re-elected in 1980 decided to tackle the issue because of demands from prairie farm leaders, including the three grain pools, that Ottawa pick up railway losses under the freight rate fixed in 1897 in return for farmer agreement to pay higher freight rates in future.
In effect, he argues that prairie farm leaders opened the Pandora’s Box that they eventually wanted to close again.
His memoir also offers a glimpse of the passion involved in the debate.
Three prairie farm proponents of paying the subsidy to farmers showed up at Pepin’s door after the cabinet reversed itself because of Quebec pressure.
The group, including Alberta Cattle Commission official Chris Mills, had a bottle of whisky.
“Mills shook my hand and said: ‘This is the last time we’re meeting as friends,’ ” Kroeger wrote. ” ‘From now on, we’re enemies.’ “
