Federal Agriculture Minister Lawrence MacAulay has heard the Canadian grain sector’s request to fix a trade irritant over grading imported American wheat, but isn’t saying if he’ll do anything about it.
Given United States President Donald Trump’s bellicose anti-trade comments, followed last month by Montana Sen. Jon Tester’s resolution to the U.S. Senate’s finance committee, the Western Canadian Wheat Growers Association (WCWGA) issued a news release urging Ottawa to “harmonize regulations and ensure the free flow of wheat between Canada and the United States.”
Tester’s resolution states Canada should grade Canadian and American wheat the same way and that the president should examine whether Canada’s grading laws adhere to trade agreements and “insist on full access for United States exporters of wheat to the Canadian market.”
It’s not a new issue and it’s one Cereals Canada wants addressed too, executive director Cam Dahl said in an interview May 9.
“We should address this and take it off the table,” he said.
The U.S. has long complained when its wheat is delivered to a Canadian elevator it receives the lowest Canadian Grain Commission grade in the class, even if the variety is registered to be grown in Canada.
Canadian wheat exports that include U.S. wheat must also be declared, which could prompt grain companies to segregate U.S. wheat, making it less attractive to Canadian elevators, U.S. officials claim.
But MacAulay’s office says American wheat can be purchased by Canadian grain companies and processors.
“Canada’s grain-grading system does not prohibit U.S. producers from contracting with Canadian grain companies and receiving fair value for their product,” MacAulay’s office said in an email May 9. “There is nothing in the current grain-handling system preventing U.S. producers from entering into contracts with grain-handling companies or processors located in Canada to get a fair price for the quality of product being delivered.”
While Canada’s grain industry — including the Western Grain Elevators Association — agrees, the industry says a change to accommodate the U.S. isn’t hard to do.
“It wouldn’t have any negative impact on Canada,” Dahl said.
The minister’s office noted agricultural trade, worth $50 billion a year, is important to both countries.
“We are committed to ensuring our integrated economies will continue to benefit all Canadians and Americans, including farmers,” the minister’s office wrote, stopping short of saying whether the government will amend the Canada Grain Act.
When asked by email if the government was planning an amendment, and if not, why not, in a May 11 response the minister’s office said: “We understand that there continues to be interest in updating the Canada Grain Act. The minister has been listening to stakeholders to hear their views on this and other issues affecting Canada’s grain sector.”
WCWGA president Levi Wood said he wasn’t disappointed with MacAulay’s answer.
“I would say we’d obviously like to see him do it,” Wood said. “But I think it might be part of the political environment we are in right now. There is a lot of posturing going on… with renegotiating NAFTA being a big one. I’m hoping maybe potentially this is something that can’t be addressed in some of those changes. I think we are going to see it.”
The government might prefer to make the change in a bill proposing a wide range of changes to the legislation, Wood added.
The previous government included the amendment in two bills, but neither became law.
The WCWGA doesn’t want a small complaint to blow up and restrict Canadian grain farmers’ access to U.S. markets, Wood said.
“Access to the U.S. is one way of creating ancillary competition for our products,” he said.
“It is very important access for the Canadian farmer to be able to enter the U.S. market. I think it helps to increase the competition and sometimes the price and sometimes the basis for farmers simply because it does serve as a competitive measure.”
That was part of Wood’s message when he testified before the House of Commons Trade Committee May 11 in Ottawa.
“It is very much a simmering issue,” Wood said.
“We’d like to see it dealt with before it became more of a broad issue and it started to have a negative impact on industries on both sides of the border.”