Farmers for economic freedom

Updates from the Canadian Farm Enterprise Network, Canadian Farmers for Justice and the Prairie Centre. Several of the items appearing here originally appeared in an email list operated by Dwayne Leslie at

web posted February 21, 2000

Auditing the Canadian Wheat Board

By Craig Docksteader

By June of this year, the Auditor General of Canada will begin an audit of the Canadian Wheat Board. Bill C-4, the Act which amended the Canadian Wheat Board Act, required that, "Within two years after the day this section comes into force, the Auditor General of Canada may commence an audit of the accounts and financial transactions of the Corporation." That two years is up on June 11, 2000.

In many ways, the audit was a bit of a sop that CWB Minister Ralph Goodale threw to producers who were calling for the AG to have access to CWB records. Whereas producers wanted the AG to be appointed as the Board’s regular auditor, Goodale merely gave him a one-time peek at the books. The scope of the audit was not clarified, and there was no legislative requirement to make the results public. In fact the Act says that the AG of Canada "may" commence an audit, which in legal jargon means he doesn’t have to. You couldn’t get a much more anemic mandate than that.

Nonetheless, producers who want to see greater accountability and openness at the CWB rightly applauded the move as a step in the right direction. The AG’s office has since confirmed that the audit is going ahead and the report will be publicly released. At this point they are in the process of meeting with the CWB to determine the scope of the audit. Once this planning phase is complete, the audit will get underway.

In order to ensure maximum benefit for CWB stakeholders, directors and politicians, there are at least four key guidelines that should be considered when determining the scope of the AG’s audit:

1) The scope of the audit should exceed the scope and examination standards already employed by the CWB’s existing auditor. If all the AG does is repeat what has already been done, producers and politicians will benefit little from the exercise. While there is some value in affirming the accuracy of previous audits, the AG audit should go much further and examine both outputs and outcomes as well as methods and details.

2) The scope of the AG audit should focus on assessing the performance of the CWB. While it is beyond the mandate of AG audits to comment on the merits of political policy, the AG has a unique role in providing Parliament with an assessment of the effectiveness of public policy. CWB records are regularly audited for their adherence to generally accepted accounting principles, but the CWB’s performance in carrying out its public policy mandate has never been examined.

3) The AG audit should employ examination standards comparable to the special examinations required for Crown corporations required under the Financial Administration Act. Every five years Crown corporations under the purview of the Auditor General’s Office are subject to a special examination in which the AG must report any observed lack of due economy, efficiency, effectiveness, or regard for the environment. The CWB has never had such an audit in its 65 years of operation.

4) Because the CWB is so secretive, the AG’s audit report should both provide maximum disclosure to stakeholders and yet protect commercially sensitive information. While the CWB has struggled for years to come up with a definition of commercial sensitivity, the AG deals with this balancing act all the time in his audits of other commercial Crown corporations. In these audits he is obligated to comply with section 153(1) of the Financial Administration Act, which states that commercially detrimental information cannot be contained in publications to be tabled in Parliament.

The AG has a unique opportunity to make a significant contribution to Parliamentarians, stakeholders, and the general public by scrutinizing the performance and operations of the CWB. But the scope of the audit will determine if that potential is ever realized.

web posted February 14, 2000

What will Collonette do?

By Craig Docksteader

Within days we could find out how Transportation Minister David Collonette has decided to fix the prairie grain transportation and handling system. Or should we say, IF he has decided to fix the system.

It’s no secret that there is a lot of pressure on the federal government to stick with the status quo. Talking about making reforms was a nice exercise until it came down to the nuts and bolts of the issue. But as soon as you start to tinker with the sacred cows of the prairie grain industry, you’ve ventured into a field of political land mines.

For most farm organizations, this poses little problem. Their positions and issues are not determined by holding a finger in the air to check the direction of the political wind. Rather, policy is established as a result of successful resolutions put forward by their members, or by the founding objects of the organization. They promote change from within the parameters of their established guidelines, not by darting quickly in front of the nearest crowd so as to appear to be leading them.

But politics doesn’t work this way. Although policy is important, what you believe is only as valuable as the amount of support you have behind you. The currency of political power is popularity. You’d best not waste it, or throw it away frivolously. If you must make decisions, weigh them meticulously on the scales of public opinion before deciding to implement them.

Herein lies Minister Collonette’s problem. Having received a clear mandate from prairie producers to fix the grain handling and transportation system, there is still no clear consensus on how he should do this. Justice Estey was to make recommendations that reflected, "as much as possible, a high degree of consensus amongst system stakeholders." He couldn’t find any such consensus. Neither could Arthur Kroeger’s implementation committee. With the file now back on the Minister’s desk, we shouldn’t be surprised that there’s no consensus around the cabinet table either.

Muddying the waters further is the fact that some participants have been jumping around from one side of the issue to the other, making it difficult to get a clear picture of where the land lies. In June of 1999, the Saskatchewan Association of Rural Municipalities wrote to Arthur Kroeger insisting that he "follow the spirit of the Estey Report in order to design the grain transportation system that will take us into the next millennium." But then, on February 3rd of this year, SARM wrote to Minister Collonette trashing both Kroeger’s recommendations and the farm groups who see merit in them.

The Saskatchewan government made a similar flip-flop, initially agreeing with Estey’s proposals and then suddenly getting cold feet. The consensus that a commercially-oriented, competitive system was needed quickly eroded as politicians scurried to find the front of the pack.

Ironically, however, there is no clear indication of where the front of the pack is. Although some producers are strongly against Estey’s proposed reforms and many are strongly in favour, the bulk of producers remain uncertain. They simply want a resolution to the problems that plague the grain transportation and handling system and will accept whatever decisions are necessary to accomplish that.

History will be the ultimate authority on whether Collonette delivers the public policy required to fix the grain industry and move it forward. Either he will give producers the reform they need and want, or he will opt to join the ranks of those who carry the popular sign, "Where are they? Which way did they go? I must find them -- I am their leader!"

web posted February 7, 2000

The game goes on

By Craig Docksteader

In this game, you are a prairie farmer who markets his product through a government-established marketing monopoly called the Wheat Board. Because a large portion of your income is dependent on the performance and activities of the Wheat Board, you want to ensure that Wheat Board staff and management are achieving the highest possible return on your product, with the lowest possible operating costs. Because you are busy farming, you will rely on your elected director to ensure that this is happening.

To begin the game, each player must elect a director to the Wheat Board (maximum 10 players). What you do not know, and must determine throughout the course of the game, is whether your elected director is being effective or ineffective in his role. Thus the objective of the game is to hold your director accountable and accurately determine if he or she is doing a good job. This is accomplished by asking your director specific questions and obtaining informative answers.

Let’s play the game.

1. The new board of directors has their first meeting and affirms that openness and accountability to farmers is very important to them. You are encouraged by this news. Move forward 3 spaces.

2. You learn that the new board of directors has brought in a consultant from Vancouver to give them advice on how to be effective directors of a multi-billion dollar commercial corporation. You are encouraged that the new directors are anxious to do a good job. Move forward 5 spaces.

3. In conversation with your elected director you discover the Vancouver consultant has advised the directors that they must "forget where they came from and how they got to the boardroom". They have been told that in order to do an effective job, their loyalties must be to the Wheat Board and not the farmers who sent them there. Move back 3 spaces.

4. It occurs to you that money from the sale of your grain paid for this consultant’s advice. Move back 2 more spaces.

5. After an important meeting to determine whether farmers would be allowed to set up their own pasta plant without penalty, Wheat Board directors vote it down. Disappointed in the decision, you make a point of asking your director for a copy of the voting record. To your dismay you are told that the vote was done by secret ballot. No further information will be made available. Miss a turn.

6. The Wheat Board conducts a public opinion poll of farmers to determine their attitudes toward the Wheat Board’s performance. After asking your director for the results of the poll, you are informed that they are secret. Your director claims he would like to give them to you but cannot do so. Miss another turn.

7. After finding out that the Wheat Board directors have considered a business plan for the Wheat Board, you ask your director for his opinion on the plan. You are told that he is prevented by board policy from giving you his opinion. Move back 1 space.

8. You discover that your director is being asked to sign a confidentiality agreement which would prohibit him from telling you anything that does not meet with the approval of the board. You become disillusioned about the benefits of having an elected director. Move back 2 spaces.

You have not moved very far since this game started. Perhaps you should suggest to the creators of this game that they consider making some changes to it.

web posted January 31, 2000

Shut up and pay

By Craig Docksteader

When former Canadian Wheat Board Commissioners Lorne Hehn, Gordon Machej and Richard Klassen walked away from the CWB on December 31, 1998, they didn’t leave empty-handed. Having had their contracts terminated by the federal government so the new governing board could assume office, a little provision in their contract immediately kicked in, making them each more than a quarter of a million dollars richer.

For years this little perk went undetected by farmers and parliamentarians, thanks to the wall of secrecy that surrounds internal CWB operations. But ever since 1980, when CWB Commissioners quietly put the perk in place, every time a commissioner retired or quit there was a cheque waiting for him at the office, equal to two years’ salary. It wasn’t until 1995 that news of the payments finally bubbled to the surface when an Ottawa-based researcher stumbled onto the information in an Access to Information request to the federal government’s Privy Council Office.

The information received under the Access to Information Act shows that the perk’s journey to the sun really began in 1991, when the federal government amended the Financial Administration Act. These amendments resulted in a review of Crown corporations, which included a review of the terms and conditions of employment for CWB Commissioners. When government officials found the provision for a handsome "loss of office" payment on the CWB books, it was deemed unacceptable because it exceeded the value of benefits available in the private sector.

On May 3, 1993, officials from the federal government’s Privy Council Office (PCO) met with CWB Commissioners Hehn, Hetland, Machej and Beswick to discuss the problem. A few days later another high-level meeting took place, this time with the CWB’s top legal advisor, Margaret Redmond, and Pat Wallace, Head of Human Resources at the CWB, along with two PCO officials.

The lines were drawn in the sand. One PCO official stated in his July 27, 1993 letter to Pat Wallace, "It remains our view... that the loss of office provision and current eight week vacation entitlement result in a benefits package that remains considerably higher than for comparable positions in other corporations." But CWB officials dug in. They went on tosuccessfully argue that the Commissioners had a legally binding contract with the CWB which had to be honored.

As Ms. Wallace later explained, the package was deemed necessary to prevent Commissioners who quit or resigned from getting jobs in the grain industry for at least two years. "They have a lot of commercial information... that would be extremely valuable," explained Wallace in 1995 when the perk came to light. "It made them unemployable for that length of time."

Farmers have never seen the contracts signed by the former Commissioners. And under current CWB policy they never will. They’ve been told that the perpetual wall of secrecy is necessary because all CWB contracts are highly commercially sensitive, even after 20, 30, 40 or 50 years.

But this leaves a lot of questions unanswered. Like, why, when farmers want information, are CWB contracts so sensitive, even after 20 years? And why, when a former Commissioner wants to get a job with another grain corporation, is the information then considered to not be commercially sensitive after only two years? And to top it off, why is former CWB Commissioner Richard Klassen already working for Saskatchewan Wheat Pool, one of the largest grain corporations on the prairies, after being gone from the CWB for only 12 months? Isn’t this a breach of the contract that required farmers to pay him more than $250,000?

Only time will tell if farmers can get answers to these questions, or if they are just required to shut up and pay.

Farmers question CWB severance policy after former CWB commissioner accepts position with Saskatchewan Wheat Pool

The recent announcement that former Canadian Wheat Board Commissioner Richard Klassen has accepted an executive position with Saskatchewan Wheat Pool has farmers asking questions.

Ike Lanier, President of the Centre for Prairie Agriculture (Prairie Centre), says the announcement demands the CWB clarify why it gave its former commissioners severance packages worth over a quarter of a million dollars.

"Prairie farmers paid close to a million dollars out of the CWB pool accounts in severance to the three former commissioners," said Lanier. "The CWB has maintained all along that the golden handshakes were necessary because the commissioners were privy to commercially sensitive information at the CWB and had to be prevented from getting jobs in the grain industry for at least two years. Now we learn that only 12 months into the 24 month period, farmers were either misinformed about the terms of the severance, or the contract is not being honored."

Lanier says that these kinds of contradictions in board policy foster mistrust and suspicion because farmers are repeatedly denied access to non-commercially sensitive information.

"Secrecy at the CWB makes it impossible for farmers to know what’s really going on. We are not allowed to see the details of any contracts even when they are 50 years old. It’s outrageous that we can get information from CSIS [Canadian Security Intelligence Service] easier than the CWB."

The Prairie Centre maintains that the CWB should be subject to the federal Access to Information Act so farmers can access non-commercially sensitive information in a timely, accountable manner.

Craig Docksteader is Coordinator with the Prairie Centre/Centre for Prairie Agriculture, Inc. "Where Do We Go From Here" is a feature service of the Prairie Centre.

Prairie Centre/Centre for Prairie Agriculture, Inc.
#205, 1055 Park Street
Regina, SK
S4N 5H4

Phone: 306-352-3828
Fax: 306-352-5833
Web site:

The CFEN needs your help! The battle against the Canada Wheat Board can only continue with your support.

Canadian Farm Enterprise Network
Box 521
Central Butte, Saskatchewan
S0H 0T0

Write the following and demand free market rights for Western Canadian farmers!

The Canadian Wheat Board
423 Main Street
P.O. Box 816, Stn. M.
Winnipeg, MB
R3C 2P5

Telephone: (204) 983-0239 / 1-800-ASK-4-CWB
Fax: (204) 983-3841

Email Address:

Ralph Goodale
Minister Responsible for the Canada Wheat Board
Department of Natural Resources Canada
21 - 580 Booth Street
Ottawa, ON
K1A 0E4

Telephone: (613)996-2007
Fax Number: (613)996-4516
Email Address:

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