Ottawa will allow two grain ships ordered by the Canadian Wheat Board to be built and then sell them to recoup the money, says agriculture minister Gerry Ritz.
He told reporters Nov. 22 the Conservative government has not yet decided how to pay for them but will avoid sticking the CWB pools with the cost.
“It would cost more to cancel than to recoup so the best advice we have is to let the contract revolve and at some point let it be known they will be for sale,” Ritz said after a speech to a Canada Grains Council industry symposium in Ottawa.
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“We’ll do it in the best interests of farmers so they don’t get caught. We’ll do our damnedest to make sure the pool monies don’t get pirated.”
The CWB board of directors’ voted this year to buy two new St. Lawrence Seaway lakers for delivery by 2013 and put a $13 million down payment into the deal out of the pool accounts.
The CWB said the overall cost would be $65 million over four years and save the pools $10 million annually in reduced shipping costs once in operation. The ships would be operated by a private marine company.
With the CWB losing its single desk powers by the end of the year, chair Allen Oberg said the money used for the down payment should be returned to the pools from the board’s contingency fund.
“One of the things the board believes is that we’d like to reimburse farmers for the money they have paid and will pay on purchase of the lakers because that’s an asset they will no longer own or receive any benefit from,” he said.
Ritz did not sound inclined to agree. “Funny he didn’t use that to begin with,” the minister said. “There was $100 million in the contingency fund, so why didn’t they use that in the first place? Why did they dip into the pool account? It is a death bed conversion.”
The contingency fund accumulates from profits earned on CWB transactions outside the pool.
Meanwhile, with the government raising the contingency fund’s maximum level to $200 million to backstop the proposed voluntary wheat board, questions remain about how that money can be used.
Government officials insist federal funds and not the contingency fund will be used to pay CWB wind-up costs.
However, Ritz last week again raised the possibility the fund could be used to pay severance costs for CWB employees. He said the government will conduct an audit of the board once the monopoly is gone and then develop a plan about impending costs with the government- appointed board.
“(Severance) is a possibility,” he said. “We’re not ruling anything out at this point. We’re not saying definitively that it’s for that.”
