Myths & Facts

Gone are the days when people blindly believe everything that is spoken or written. Now we require documented proof to substantiate our claims. In this high tech world providing documented proof should be a simple task. Unfortunately, when dealing with the CWB, this is not always the case. In the Facts & Myths that follow, our Facts will be backed up with the opportunity for you to check for yourselves the validity of our statements.

Myth: The CWB is not a government agency.

Fact: 
In the 2001 Public Accounts of Canada under Enterprise Crown Corporations and Other Government Business Enterprises it states “There is also a number of self-sustaining government business enterprises that are not considered Crown corporations within the meaning of the Financial Administration Act, but which are owned or controlled by the Government and ultimately accountable to Parliament through a minister of the Crown for the conduct of their affairs. These are referred to as “other government business enterprises” and include the Canadian Wheat Board and the various Port Authorities.

Document:
2001 Public Accounts of Canada – Summary Report & Financial Statements – Section 9 Loans, Investments & Advances  (Public Accounts of Canada can be accessed through the Links Page)

Myth: The CWB has moved from an exempt Crown Corporation closely associated with the Federal Government with a reputation for secrecy…. to a new shared-governance organization with a greater separation from the government.

Fact:
The Population Affiliation Report, which was updated and released in January 2002 by the Treasury Board of Canada, shows no major changes to the status of the CWB. The board is still exempt from Part X of the Financial Administration Act (Part X provides the control and accountability framework of Crown Corporations) and it is still not subject to the Access to Information Act.

Document:
Treasury Board of Canada - Population Affiliation Report on Crown Corporations
This can be accessed through the link provided in the “Questions for the CWB”

Myth: Since the CWB went through a Special Examination Audit by the Auditor General of Canada’s Office, farmers no longer need to question the board on its financial activities.

Fact:
The Special Examination Audit was an audit of Management Systems and Practices, not an audit of financial statements (annual audit). The difference between an annual audit and the special examination is that, in an annual audit the opinion expressed is with respect to the financial position and financial results of the Corporation’s operations, whereas in a special examination, the opinion is with respect to the achievement of the statuary control objectives by way of the corporations systems and practices.

The audit did not examine or comment on the mandate and role of the CWB, in particular its role as a monopoly, single desk seller of wheat and barley, including:

• the objects or purposes of the Corporation or restrictions on the businesses or activities it may carry out
• the objectives of the Corporation, and
• any policy decisions of the government that relate to the CWB

Documents:
(1) Manual on Special Examinations of Crown Corporations – Office of the Auditor General of Canada. http://www.oag-bvg.gc.ca/ 
Click on Reports & Publications… then Audit Methodology… then Special Examination Audit

(2) Canadian Wheat Board Special Audit

Myth: The NAFTA agreement does not allow the monopoly of the Canadian Wheat Board to be reinstated after a trial period of Dual Marketing.

Fact:
Chapter 15 of the NAFTA Agreement states that there is nothing in the Agreement that shall be construed to prevent a Party from designating a monopoly or maintaining and establishing a state enterprise.

Document:
NAFTA Agreement  Article 1502: Monopolies and State Enterprises

1.Nothing in this Agreement shall be construed to prevent a Party from designating a monopoly

Article 1503: State Enterprises

1.Nothing in this Agreement shall be construed to prevent a Party from maintaining or establishing a state enterprise.

Myth: The CWB has exclusive privileges to license or undertake exports of wheat and barley from Canada and their powers are practiced fairly and equally amongst all provinces in Canada.

Fact:
Export licenses are routinely denied in the designated area (AB, SK, MB, & northern BC) while in Eastern Canada export licenses are freely granted. Farmers in the West are fined or sent to jail for trying to export their grain while farmers in the East are free to sell their grain to the highest bidder they can find inside or outside Canada.

Documents:
The Canadian Notification to WTO on State Trading Enterprises
Farmers for Justice
Ontario Wheat Producers Marketing Board
http://www.ontariowheatboard.com/

Myth: The CWB has done studies on costs of single desk selling versus the open market system and their studies prove that single desk selling is the most effective way to market grain.

Fact:
The CWB has done a great many costly studies and surveys but unfortunately they will only release information on the results that suit their needs. To be fair, everyone should have the opportunity to view all the results whether they serve the purpose of the CWB or not when it is done with farmer’s money. Other very qualified researchers have done studies over the years that indicate that the open market system is more efficient than the single desk.

Document:
The Economics of Single Desk Selling of Western Canadian Grain
1996  Colin A. Carter and R.M.A. Loyns
http://www.agric.gov.ab.ca/economic/market/sngldesk.html

Myth: If the CWB refuses to answer farmer’s detailed financial questions and ignore their financial concerns about pool operations, dissenters will eventually fall into line or just go away.

Fact:
Statistics show that farmers are not falling into line but they are going away. Producers are turning from the CWB. The number of delivery permits issued has fallen dramatically over the last decade and the amount of grain handled has plummeted while administration and general expenses have soared. Unfortunately, the most important fact of all has been overlooked by directors: without farmers who wish to sell their grain to them, there will be no Canadian Wheat Board.

Document:
Statistics from CWB Annual Reports 1987 to 2000