PORTAGE LA PRAIRIE, Man. – An educated hunch based on private
assurances from government that the Crow Benefit would be abolished was
one reason Can-Oat Milling Inc. located in Manitoba in the early 1990s
rather than in the United States, says the company president.
Karl Gerrand said researchers analyzing the effects of the end of the
Crow rate grain transportation subsidy in 1995 could look at his plant
as a concrete benefit.
“Our understanding that the Crow rate would be abolished was
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fundamental to our decision to invest in Canada,” he said. “If we had
not thought that, we would not have come here.”
Gerrand said when investors were considering where to build an oat
plant in the late 1980s, Canada had two major disadvantages. Oats were
marketed by the Canadian Wheat Board and the Crow Benefit for export
grain meant there was an advantage to shipping Canadian oats to U.S.
plants.
The Progressive Conservative government of the day, with Portage MP
Charlie Mayer as the CWB minister, solved the first problem by taking
oats away from the wheat board.
And company officials were told by politicians and government officials
that it was just a matter of time before the Crow was abolished.
“We were assured privately as we investigated this that the Crow’s days
were numbered,” said Gerrand. “We felt the Crow rate was not going to
last and on that basis, we chose Canada and Portage. It took five years
before it met its demise, but we guessed right and it paid off.”
The Can-Oat plant was opened in 1991 and the Crow Benefit was abolished
in 1995 in then-finance minister Paul Martin’s second budget.
During the intervening years, Can-Oat has expanded into the largest
independent industrial oat miller in the world, purchasing 10 percent
of the prairie oat crop – 250,000 tonnes last year – and employing 150
people at the Portage plant.
The company president said 95 percent of sales are to the U.S.
Gerrand said the Crow subsidy often caused oats from the Prairies to be
shipped east to Thunder Bay to get the subsidy, on a rail line that
passes by the plant, and then returned to Winnipeg for shipment south
to American competitors of Can-Oat.
