Government's analysis of wheat board changes questioned

The government's response to an opposition question suggests the agriculture department conducted only limited research into the impact of dismantling the Canadian Wheat Board's monopoly system.

Departmental analysis based on controversial 2008 study, only examined over summer 2011

Supporters of the Canadian Wheat Board rallied on Parliament Hill Nov. 15 to protest the government's bill to dismantle the board's monopoly on Prairie wheat and barley marketing. (Sean Kilpatrick/Canadian Press)

The Harper government appears to have proceeded with plans to dismantle the Canadian Wheat Board's monopoly without conducting a broad analysis of the impact of that move.

The extent of the department's analysis is revealed in the government's response to a written question put on the House of Commons order paper by Liberal MP Ralph Goodale.

Officials appear to have relied almost entirely on assumptions made in a three-year old study done for the Alberta government by Informa Economics. The methodology and conclusions of that study were challenged by supporters of the wheat board at the time of its release in August 2008.

Goodale's query, placed on the order paper on Sept. 20, asked whether "any studies of any kind whatsoever [had] been undertaken by any Minister or any department or agency, or any non-governmental individual or entity at the request of any Minister or government department or agency, pertaining to the impacts, consequences, costs or benefits of eliminating the single-desk marketing system of the Canadian Wheat Board..."

Goodale requested information on the studies' terms of reference, authorship, timing, and principal findings.

The government tabled a 2 1/2 page written response to Goodale's inquiry on Nov. 14.

The response suggests that agriculture department officials did not analyze the impacts of the Harper government's campaign commitment to dismantle the Canadian Wheat Board's single-desk marketing system until the summer of 2011.

No other research or studies are cited in the department's response despite the fact a range of work with a variety of conclusions is readily available online and from other public sources.

For example, a study published in October by the George Morris Centre, a Guelph-based independent think tank, concluded that the changes "would lead to significant investment, growth and economic opportunity in Western Canada."

When the Informa study was released in 2008, the wheat board said the report "used false assumptions and selective data to undermine the value of the CWB."

The government's evaluation relies on Informa's conclusion that the wheat board does not deliver higher prices for Western Canadian farmers.

Other studies, including the wheat board's own data, have contradicted this finding, but those studies do not appear to have been considered by the department based on this written response.

The price conclusions in the Informa study were attacked for not differentiating between different types of wheat and for focusing on only a limited selection of the markets into which the wheat board sells.

The department's analysis also noted that handling costs for wheat board grains were found to be higher in the Informa study than those for non-wheat board grains, such as canola. The study made those conclusions despite advice from the corporation that supplied the data that those cost comparisons cannot be made.

The department analysis suggests higher profits are likely for farmers if the wheat board's monopoly ends. It also suggests that land rental rates will increase, and farmers are likely to plant more wheat and barley after an open market system delivers the anticipated higher prices. Grain exports also are expected to rise.

The summary of the departmental analysis also warns of lower profits for the livestock sector, due to higher feed costs once board grains are sold on the open market.

Agriculture Minister Gerry Ritz dismissed suggestions the government didn't do enough analysis.

"While the Government tabled a number of reports showing the explicit benefits of an open market, the fact remains that the government has not only the right to change legislation but the responsibility to deliver on the commitment we made to Western Canadian farmers," Ritz said in an email to CBC News.

"It is unfortunate the Liberals are debating the past when they can be working with the government to ensure the stability in grain markets."

The department says in its tabled response that it "does not plan to release its analysis as it was done for internal purposes."

In a follow up email to CBC News, a department spokesperson said the government "used a myriad of reports, studies and consultations with farmers and their organizations to inform their legislative proposals."

The spokesperson said Ritz tabled a number of reports on the benefits of an open market with the House legislative committee, including reports from the CD Howe Institute and the George Morris Centre, but added that the Liberal question did not ask about reports "other than those conducted or commissioned by the government."

Writing on his blog last week, Goodale said "the Conservatives finally confirmed in writing that they have NOT conducted a single credible study into the impacts, consequences, costs or benefits of killing the CWB’s single-desk marketing system."

"They are destroying that system based entirely on ideology and prejudice, not facts or evidence," Goodale wrote.  "It’s a foolish way to govern."

The final vote on the government's legislation, C-18, could happen this week in the House of Commons. The Senate is already in talks to speed its review and passage of the bill.

The government wants to pass the C-18 quickly so an open market is in place for selling the 2012 wheat and barley crop. However, several legal challenges to the government's intentions may delay or complicate the transition.