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Hill Dispatches

karl nerenberg's picture
Karl Nerenberg has been reporting on federal politics from Parliament Hill for rabble.ca since September, 2011. In his long career, he has won numerous awards as a broadcaster and documentary filmmaker.

Giving away Wheat Board assets and Pat Martin's outburst in the House

| December 3, 2014
Photo: Wikimedia Commons

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If you believe that government monopoly agencies are not the best way to get Canadian agricultural products to market you probably applauded when the Harper government eliminated the Canadian Wheat Board's control of the prairie grain business.

That move "liberated" Western farmers, freed them from the bondage of "big government," Prime Minister Harper boasts, and allowed them to take part fully in the free market economy.

But even if you are an enthusiastic cheerleader for open markets in agriculture, you've got to be a bit worried about the Conservatives' current plans for the no-longer-single-desk Canadian Wheat Board.

The Harper government legislation that got rid of the Wheat Board's monopoly also stipulated that the agency should be fully privatized by 2017.

Farmers' offer of $250 to $300 million rejected by Board

Playing by Conservative rules, a Canadian private company called Farmers of North America (FNA) put together a bid to buy the Board and all its assets (grain elevators, rail lines, ships, offices, and other such stuff).

The FNA offered somewhere between $250 and $350 million for the Board. On the face of it and based on estimated evaluations of the Board's value, that offer seems like a good price for Canadian taxpayers, who own at least some of the Board's assets. And the company would keep ownership of the Board's assets in Canada, which prairie farmers and the Harper government would consider to be something of a virtue, one might think.

The current Wheat Board's Conservative government-appointed board of directors rejected the offer, however, without giving any reason -- at least not publicly.

Now, there are persistent rumours that the Conservatives plan to simply transfer ownership of the Board, and all its grain handling equipment, to U.S. mega-corporation Archer Daniel Midlands, for a price of -- wait for it -- $0.00.

The entire process is totally non-transparent. It seems that neither the public nor Parliament has the right to know anything in detail about how the government plans to privatize a venerable Canadian institution.

Gerry Ritz speaks gnomically about 'recapitalizing' assets. Which means ...?

On Tuesday, December 2, in the House, a few days after Minister of Agriculture Gerry Ritz shared very sparse information on the Wheat Board's future with the House Agriculture Committee, the NDP's Agriculture Critic Malcolm Allen tried to get clear and forthright answers.

Here's how the exchange between Allen and the Minister went:

Allen: "Farmers of North America recently offered to buy the Canadian Wheat Board ... The Conservatives rejected the offer. They did not give a reason. They just said 'no'. Now, we hear the minister will hand over the Wheat Board's assets to the private sector for a grand total -- get this -- of zero... I ask a simple question. Why would the Conservative government give away these assets free to multinational corporations instead of simply selling to Canadian farmers and actually gaining a real value for Canadian farmers...?"

Ritz: "...The Farmers of North America's bid was adjudicated by a third-party auditor and legal team that the Canadian Wheat Board put into place. This was not a political process. As to the assets of the Wheat Board, they will become part of a privatization plan as it looks to recapitalize with another partner. That is exactly what is happening, under the auspices -- as I said, all these tenders are looked at through the eyes of a third-party audit team, as well as a legal team."

So there you have it: The Minister of Agriculture's fulsome explanation. Ritz never denied that the Wheat Board was preparing to, in effect, give away its assets. He merely obfuscated. He said those assets "will become part of a privatization plan" -- as though we did not know that already.

The only sliver of fact that Ritz cared to share with the House -- and with all Canadians -- was that the Board is looking "to recapitalize with another partner."

"Another partner?" Other than whom? The government of Canada?

And "recapitalize"? What exactly does that mean? Is it a fancy way of saying giving away one's assets in exchange for... what exactly? An equity position in the company acquiring the assets? Promised investments by the company acquiring the assets?

We have no way of knowing -- not based on the Minister's nebulous and cryptic responses in the House, at any rate.

Good news: The Wheat Board uses services of lawyers and accountants

Ritz obviously thought he had a strong argument when he told the House that the Board's privatization process was not "political."

But the NDP's Allen had not suggested that process might have been political. He only wanted to know what the Board's plans were. Why had the Board rejected the farmers' consortium's bid? And were the rumours about a plan to give the Board's assets to a U.S. corporation true?

Ritz's comment on the "political" point was entirely a red herring -- nothing to do with the question at hand.

The Minister's other key point, however, should give comfort to all Canadians. He told the House that the Wheat Board engages accountants (a "third party auditor") and lawyers (a "legal team") when it negotiates deals to reject bids from farmers' groups or divest itself of its entire assets.

That's reassuring.

Some of us might have been under the misapprehension that the Wheat Board was seeking the "third-party" guidance of ballet dancers and jazz musicians rather than the usual crew of richly rewarded professional advisers and deal-makers.

Arguing that a taxpayer-owned entity does not need to behave in an open and transparent way as long as it employs the requisite quota of (yes "third-party") bean-counters and legal eagles might be a definition of chutzpah -- or, if you prefer, hubris.

It was all a bit much for Winnipeg NDP MP Pat Martin, who stood up to ask a question following his colleague's round, only to have his incredulous anger at the Minister's non-answers overtake him.

"Let us see if I understand the Conservatives' business plan for the Canadian Wheat Board," Martin started out, calmly enough, and then continued for a bit in the same vein. "First, they take the largest and most successful grain marketing company in the world and then they give it away, free of charge, to an American agrifood giant which, until recently, was their greatest competitor."

And then, well, then, something in Martin seemed to snap, and he said: "My question is simple, and I ask it through you, Mr. Speaker. Has the minister lost his freaking mind? Or is he that ..."

Not surprisingly, the Speaker cut Martin off at that point.

We relate the whole exchange, here, in case readers have only heard reports of Martin's final verbal explosion.

If unparliamentary language is never justified -- as some of us, including this writer, believe -- what preceded Martin's outburst at least explains, if it does not entirely excuse, this particular episode of verbal excess.

Photo: Wikimedia Commons



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