Ottawa’s controversial proposal to create a Canadian Wheat Board contingency fund as part of the new board safety net system need not become a check-off tax on farmers, wheat board minister Ralph Goodale said last week.
He told the Senate agriculture committee April 30 the new majority-elected board of directors could decide to raise the contingency fund money another way.
One possibility is that the board could use profits from its currency exchange transactions and interest to build up the fund, said Goodale.
“It could be the Canadian Wheat Board will say that is the source of revenue we will use … without any checkoff,” he said.
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The proposal in wheat board reform legislation Bill C-4 to create a contingency fund to replace some of the government guarantee of board business has been one of the sore points among critics of the legislation.
The government is withdrawing the federal guarantee from mid-year initial price adjustments, and giving the new wheat board the power to cash purchase outside the pool and to close pools quickly for early final payments.
The contingency fund is meant to act as a “backstop” to losses in any of those transactions.
Critics have speculated the fund could grow into the hundreds of millions of dollars and be raised from checkoffs on farmer grain deliveries.
They have described it as a new tax on grain farmers already suffering from falling incomes.
Senators grilled the minister on the contingency fund complaints. Goodale, appearing during one of the last public Senate committee hearings on the legislation, tried to calm the fears.
He said he would be happy to consider advice that a cap be placed on the size of the fund, which some critics have suggested could become half a billion dollars or more.
Goodale talked of it in the tens of millions of dollars and said a fixed maximum might dilute some of the controversy.
But he did not back away from the view that the government guarantee of CWB financial transactions must be tempered as the wheat board moves from a crown corporation backed by blanket guarantees to a mixed enterprise run by a majority-farmer-elected board of directors.
