Updates from the Prairie Centre Policy Institute from Regina, Saskatchewan.

Hot off the press! Don Baron's Jailhouse Justice and
Canada's Great Grain Robbery are now available at
http://www.ajagra.com/authors_comment/baron/baron.htm

web posted December 22, 2003

It's Time for a New Relationship with the Federal Government

By Dr. Graham Parsons

Western Canada's relationship with central Canada dates back to those days when the Prairie region was split into three provinces so that it would not be a future challenge to central Canada through its size or natural resources. Today, the West is a true economic powerhouse. It has the capacity to cooperate and it is time for a new federal relationship with the region. Hopefully a new Prime Minister can also provide a basis for an enduring new relationship.

While the federal government seems to pay token service to the concept of economic development and a competitive market economy, too many of its actions effectively either deny or actively work against this concept. Let me use a few examples.

• The very structure of the federal equalization formula dictates against increasing the economy through the development of natural resources. Yet the Western Canadian economy is a natural resource economy.
• The federal approach towards environmental regulation has weakened some of Western Canada's strongest industries. The environmental regulatory framework has become a nightmare, increased the cost of business, often does little to protect the environment and reduced our competitive position. Protecting minority environmental interests may be very Canadian, but at some point common sense and economic consequences must be taken into account.
• The taxes and fees at Canadian airports have mushroomed in recent years with no improvements in service. The added federal cost on movement within the region now amounts to 72% of the base one way air fare between Regina and Calgary. Does this inhibit business travel? Of course it does. Does this inhibit the movement of Canadians within our country? Of course it does. Does it weaken the confederation and the economy? You bet.
• Federal lease arrangements at many smaller western airports are not sustainable, yet Transport Canada still seems to consider them as cash cows.
• Part II of the Canadian Wheat Board Act still requires control over Grain Elevators and Railways allowing for direct federal intervention in a market economy reducing efficiency of movement and overriding commercial agreements. Is this attractive to investment? Probably not.
• The Canada Transportation Act talks of a market environment and yet regulates as though the industry remains an administered market still owned by the federal government. This not the case. Railways, airlines, truck, ships, ports and airports are all now mostly privately owned and financed. It is time for federal policy to catch up with reality. We look for a competitive federal regulatory framework for transportation and yes let's open the western skies to U.S. carriers.
• Federal fuel taxes collected from the hugely under funded road system are systematically removed from the West and never returned to the sector. Little wonder there is such a huge infrastructure investment gap in Western Canada. Canada is the only G-7 country with no National Transportation Plan. This is an important omission out West where the distance of our geography can only be overcome by effective transportation planning.
• The GST on small business is simply an additional income tax in which the administration charges for small business in many cases actually exceed the revenues collected by the federal government. It is federal administration gone wild with a growing army of accountants and absolutely no thought to the economic costs on the most entrepreneurial of Canadians.

Too many federal actions support the old, now largely abandoned ideas on administered markets that are nearly always inefficient. Too few consider alternative methods of competitive public regulation, industry self regulation and public service delivery that can allow markets to operate freely with the minimum of intervention. Not all federal programs need to be delivered through the state. In fact other models of public sector delivery have much higher benefits for the economy.

I sincerely hope that the new Prime Minister can create an environment that will allow the federal government to again become a more effective and therefore a more welcome presence in Western Canada.

Excerpted from a speech Dr. Parsons recently delivered to the Western Economic Opportunities Conference in Calgary. An economist, Dr Parsons is President of the Organization for Western Economic Cooperation and sits on the Prairie Centre’s Board of Academic Advisors.

web posted December 8, 2003

Western Australian grain producers given a choice

By Ken Dillen

Many of you might recall that earlier this year I was invited to Australia by the Pastoralists and Grazers Association (PGA) to give a presentation regarding the Canadian Wheat Board (CWB) monopoly and the prairie farmers who were jailed for selling their own wheat and barley into the United States. While there, I also had an opportunity to spent time visiting with Australian farmers, enjoying their tremendous hospitality, and learning that the problems they were experiencing are similar to those we face in Western Canada.

Like their Canadian counterpart, the Australian producer experiences frustration when dealing with their government controlled Wheat Board. And like the CWB does in western Canada, the Australian Wheat Board (AWB) defends its right to maintain a monopoly on wheat and barley exports.

In a recent letter, PGA Policy Director Damian Capp reports that Western Australia (W.A.) has enjoyed a tremendous growing season and their harvest is now under way. They expect to yield approximately 14 million metric tonnes of all grains: wheat, lupines, canola and barley. Following last year's drought, their harvest amounted to about 5.3 million tonnes so this has been a tremendous turnaround for them.

"What is really significant this harvest is that in W.A. we are operating under a new Grain Marketing Act,” says Damian. “This Act covers barley, Canola, and lupins and a Grain Licensing Authority has been set up to administer the Act. The Authority has the power to issue bulk export licenses other than the government statutory authority which runs the compulsory pools"

He goes on to report that, so far, licenses have been issued for about 430,000 tonnes of feed barley and smaller tonnages of canola (48,000 tonnes) and lupins (20,000 tonnes). “What we have seen is a rally in the cash market for feed barley as growers have been able to take advantage of having 4 or 5 different exporters bidding up the daily price for feed barley. The Grain Pool of W.A. (the statutory marketer) and the farmer group here that supports the monopoly have been squealing like a bunch of girls but the farmers have not been complaining. They have been very quick to adapt and are happy to sell for cash rather than to wait 18 months for their final payments from the pools”, he says.

To put the tonnage into perspective, they expect between 1.5 million and 1.8 million tonnes of feed barley to be harvested. With licenses having been issued for over 400,000 tonnes, this means about 25 percent of the expected total has been granted to alternative exporters to bid on. They expect about 540,000 tonnes of canola and maybe 500.000 tonnes of lupines, and are hopeful that more licenses will be issued for those crops this harvest.

"The important thing about these developments is that the opponents of de-regulation have made predictions of poor financial returns and destabilization for the grain industry – and none of that is happening. The statutory marketer is now starting to realise that the game is up and they will have to restructure their own operations in order to compete", Damian concludes.

Farmers in Ontario have not had to apply to the CWB for a license to export their own grain for some time. In fact, I have personally driven trucks loaded with grain across the US border at Windsor to be delivered to a pancake mill in Michigan - without a problem. For doing the same thing in Manitoba, Saskatchewan or Alberta, I would have ended up in jail. Somehow it just does not seem right that a Canadian law is not applied uniformly across the country.

With Alberta's Agriculture Minister, Shirley McLean, advocating a 10-year open-market test, perhaps it's time for the three prairie Ag ministers to begin working together. The first thing they might do is take Paul Martin and Ralph Goodale on a fact finding mission to Australia.

Ken Dillen sits on the Board of Directors of the Prairie Centre Policy Institute.

Prairie Centre Policy Institute
#205, 1055 Park Street
Regina, SK
S4N 5H4

Phone: 306-352-3828
Fax: 306-352-5833
Web site: http://www.prairiecentre.org
Email: prairie.centre@sk.sympatico.ca

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

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

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