CANADA

Standing Committee on Agriculture and Agri-Food

Comité permanent de l'agriculture et de l'agroalimentaire

EVIDENCE number 2,
Témoignages du comité numéro 2

Mr. Garry Breitkreuz (Yorkton—Melville, CPC): Well I'm very frustrated as I listen to all of this because it seems like we're fiddling while Rome burns. I'm in total agreement with everything that I've heard here so far. I don't know what kind of evidence you still need. You asked us to produce evidence. If you need evidence and I don't know, do you not go out and gather that? If you came to my riding and you talked to the farmer, he would tell you he is getting 20 cents a pound. But if you talk to the consumer, the price has not dropped one cent in the store. What other evidence do you need besides that? Would that indicate to you there's a huge problem?

Ms. Sheridan Scott: Well it indicates certainly there's a discrepancy. It indicates there's someone who is making unusual profits somewhere along the chain. But there isn't anything in the legislation that will allow me to act in those circumstances. What I have to look at is where I can form a belief that there is collusion taking place or price-fixing taking place. As I indicated, looking at the Quebec study for example, there are a number of explanations to suggest why the prices have moved, the way the prices have moved. As Mr. Taylor has discussed, there have been fundamental changes to this market brought on by the closing of the border. That's a highly unusual event.

Mr. Garry Breitkreuz: But the border is not completely closed. These packers can ship beef and I don't know the numbers. I thought maybe you would be able to inform us. And it's boxed beef. And they're making huge profits on that boxed beef because they can buy it here for next to nothing. Some farmers will take a cow to market and they won't even get enough from that cow to fill their gas tank. I mean that's how little they're getting and these cows are ground up into wieners and all kinds of ... you know, it's all, if you look at the whole thing, I can't understand why you can't investigate that. Can you not go out and gather that evidence? It's as obvious as anything.

Ms. Sheridan Scott: Well we have certain abilities as we've described to go out and consult the data that's available and speak with industry experts. Really the issue here is whether I would go to the next stage where I conduct a formal inquiry. Because at that stage there are additional tools and enforcement mechanisms that are available. But before I get to that stage, I have to be able to form a reasonable belief that there is a contravention of the legislation. And also when I move to the next stage, I will have to be able to convince a judge for example if I want to obtain a warrant or a subpoena the basis upon which I'm asking the judge to issue that instrument.

So there's a number of stages here and we will continue to investigate this matter by consulting those who are knowledgeable but there's an additional issue, can we move to a more formal inquiry stage where we engage the powers of the state in a sense to investigate.

Mr. Garry Breitkreuz: We're fiddling while Rome burns! We can't just kind of keeping going like this. I hear you saying that you think there's adequate competition out there.

Mr. Garry Breitkreuz: There cannot possibly be. There has to be some kind of collusion in order for this to occur. Would that not be obvious to us?

Ms. Sheridan Scott: No, I wouldn't say that it's obvious that we had collusion. I'd say there's other sorts of explanations that one could have.

When we're looking at collusion, we're looking for any type of evidence of an agreement, a coordination and those types of things. I haven't seen anything in the facts that we have looked at that would allow me to form that belief.

Mr. Garry Breitkreuz: Okay, so you're saying there's not adequate competition. Is that what I just...?

Ms. Sheridan Scott: I didn't say there wasn't adequate competition. I'm saying I'm looking at whether there's a contravention of the legislation. That's my mandate.

Ms. Sheridan Scott: If you read the Competition Act, it has certain prohibitions that relate to abuse of dominance and there's a jurisdiction over mergers. There are very specific powers that have been given to the competition commissioner and also to the Competition Tribunal. If I want to bring a matter forward to the Competition Tribunal, then I have to have a case that can be made out in accordance with the law.

Mr. Garry Breitkreuz: You're telling me that you don't think that the evidence is obvious.

Ms. Sheridan Scott: I don't see the evidence right now for a belief that there is a contravention of section 45, the collusion provision, which is the one I think most people have suggested might be at play here, or section 79, which is the abuse of dominance. Those are the two that we have looked at very closely to see if we have data that will allow us to move in that direction, that would allow me, then, to move on to exercising more formal enforcement powers.

Mr. Garry Breitkreuz: Let me conclude by saying that I would urge you quickly, asap, to really get into this because the farmers in my area are being...the last 10 days the picture has changed dramatically. They feel that there is something going on out there. They're helpless. I feel helpless discussing this with you because it doesn't seem like we're going anywhere.

Ms. Sheridan Scott: I understand your frustration. I certainly have read the transcripts of the House of Commons debate and I could sense this, the deep, deep concern. I don't know if you want to tell us a bit about what's happened in the last 10 days, if there's something that would be useful and relevant.

Mr. Garry Breitkreuz: Yes. I just wanted one minute to clarify something. I don't know where Mr. McCormick is, but he questioned--

I need to clarify this because I was talking about how this is an urgent issue. What's happening now, and this problem hasn't just become suddenly worse in the last ten day, but cow calf producers now are started to calf out their cows. They're starting to come, the spring crop, they haven't even sold the last crop and that's a huge problem for them.

They're now going to their banker and they're looking for loans for the new season. One fellow came to me this weekend from Goodeve and he said my banker said I'm not giving you any more money. He needs a $50,000 loan to carry on. He said I better go to Alberta and work in the oil patch. That's what he's done. He's telling these guys to get off the farm. This is absolutely devastating. This was a fairly young farmer, so he hasn't worked very long. But he's got the farm and he doesn't want to give it up.

That's what changing now because they're getting into the new season. Something has to be done very, very quickly.

The severe weather on the prairies has made it such that their feed stocks are running very low. Remember now they've got a lot more animals that they really planned on selling but couldn't because they lose about $600 per animal below what they should be getting, they're getting $600 less. That's the crunch that they're now feeling. Those feed stocks, if the weather stays as cold as it is, may not last. That is what's happening. That's why I say ASAP something has to be done.

I just wanted to explain that comment about the last ten days, maybe for Larry's benefit. That's how things are developing. It's not that the crisis suddenly came up. You know, the crunch is really coming for these farmers. Absolutely. So I hope that gives you an understanding of how urgent it is that something happen.