The federal government has committed up to $349 million to the CWB to help it cover one-time costs associated with restructuring, downsizing and changing into a voluntary wheat marketing agency.
Federal agriculture minister Gerry Ritz made the announcement June 28 in Winnipeg, suggesting the money would help the CWB deal with costs stemming from Western Canada’s move to an open grain marketing environment.
“The Harper government promised an orderly transition to an open market for western Canadian producers, and we have delivered,” said Ritz.
“This one-time injection will put the CWB on a stable footing as a competitive marketing option for Canadian farmers.”
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The $349 million package will help the CWB cover transition-related expenses such as employee pensions, post-employment benefits, severance costs, computer system upgrades and the settlement of statutory pool accounts.
CWB president Ian White called the package a crucial step in ensuring the CWB’s future viability and said it would allow the organization to begin business Aug. 1 with a clean slate.
“This commitment ensures the transformed CWB will not bear legacy costs and liabilities, which would be impossible for a new organization to assume,” White said.
“It covers the cost of our transition into the new grain marketing environment and it ensures that we are well positioned to take on the new role that we are facing … with confidence and certainty.”
CWB wind-up costs have been the topic of some controversy.
Last year, farmer–elected directors suggested that costs associated with winding up the single-desk CWB could run in the range of $250 to $475 million.
Those estimates were based on a study conducted by the accounting firm KPMG.
Last August, Ottawa began advertising for another auditor to determine the costs associated with changing the wheat board into a voluntary agency.
The $349 million estimate announced last week falls within the range suggested by KPMG and former board members.
Stewart Wells, a former farmer-elected CWB director who sat on the board until last December, said the $349 million support package is an unnecessary cost that was forced upon Canadian taxpayers by a government that was intent on imposing its political agenda.
