Willard Estey says the Canadian Wheat Board should get out of the business of grain transportation.
The board would become a “port buyer” of grain, under a proposal put forward by Estey in his long-awaited report to the federal government
It would be left up to the railways and grain handling companies to get the right grain in place to fill CWB orders.
“It is recommended that the board have no operational or commercial role in the handling and transportation of grain,” the retired Supreme Court justice wrote in his 30,000-word report released Dec. 30.
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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
Among the other major recommendations:
- The Car Allocation Policy Group be disbanded and rail car supplies instead negotiated between railways and shippers.
- The maximum cap on freight rates be removed in return for a guarantee from the railways that the total freight bill would decline by a set amount over the next few years.
Federal transport minister David Collenette said he wants feedback on the proposals from grain industry groups and other interested parties by Feb. 1.
In his report, Estey downplayed the significance of the changes he suggests for wheat board operations.
“The recommendations introduce no startling new rules or principles for the operations of the board in Western Canada’s grain industry,” he said, adding they represent an “acceleration of the evolution already well under way” in the industry.
Not all stakeholders share that view.
“I think it’s a fairly significant change if the recommendations as proposed were all put in place,” said Charlie Swanson, president of Agricore.
In recent years there has been some deregulation in the handling, transportation and marketing of grain, he said, and most players accept that.
“But going to a totally deregulated environment, which is the sort of direction this seems to be heading, I think we’ve seen experiences to the south where that has not worked out all that well.”
Keystone Agriculture Producers president Don Dewar called the proposals “a drastic change.”
Canadian Wheat Board spokes-
person Deanna Allen also took issue with Estey’s description.
“Contrary to what he’s saying, these recommendations propose some significant changes to the commercial relationship that we have and how we operate,” she said. “If they were to be adopted as written here, that’s not tinkering.”
New directors will ponder
Other than that, the board had little to say on the report.
But Allen said the new CWB board of directors will want to study it carefully before issuing any formal comment.
“Some of the recommendations do propose things that impact on our core business functions,” she said. The CWB directors are slated to meet Jan 7-8.
A last minute submission to Estey from CP Rail formed the basis for the recommendation to do away with the rate cap in exchange for railway guarantees of lower rates.
Estey suggests an agreement to reduce total freight costs by $40 million over six years.
Because the idea arose late in the process, most other groups had no chance to comment. Swanson said last week that while details are sketchy, he’s skeptical.
“If in fact the rate cap is going to be removed, we need a great deal more shipper protection in place to offset that and I don’t see that in Mr. Estey’s report,” he said.
