The new CWB is to be reconstituted, without any monopoly or regulatory powers, effective Aug. 1, 2012 and assume all assets, liabilities and contractual commitments of the existing CWB.
The new CWB Act is to provide for the issuance of share capital and for continuation of the CWB as a company under the Canada Business Corporations Act or the Canada Cooperatives Act, at a date to be determined by the minister, no later than one year following the implementation of an open market.
Shares in the new CWB to be issued to each producer in proportion to their share of deliveries over the six-year period ending July 31, 2012. (i. e. the UGG share distribution model). Shareholders are to be voting, and shares to be distributed no later than Sept. 30, 2012 Shareholders to elect directors at a shareholder meeting no later than Jan. 31, 2013.
One share to be issued for every 10 tonnes delivered over the six-year period (approximately 12 million shares).
Prior to the share issuance, the federal government is to conduct an independent valuation of the CWB as a going concern, so that farmers have an estimate as to the value of the shares.
Shareholders to determine, by resolution, whether the new CWB is to be continued under the Canada Business Corporation Act or the Canada Cooperatives Act.
Shareholders to determine whether any restrictions are placed on the purchase or sale of shares.
To help ensure a smooth transition, the existing board of directors is to be replaced by a provisional board to be appointed by Jan. 31, 2012. The provisional board is to remain in place until new directors are elected by shareholders at the first shareholders’ meeting. We suggest the new board of directors consist of nine elected directors, plus three directors appointed by the elected directors.
The CWB’s existing equity base to be transferred to the new CWB as of Aug., 2012. The equity base is to consist of the net assets of the CWB, plus the balance in the contingency fund to a maximum limit of $22 million (i. e. the balance in the contingency fund as at July 31, 2010). Any balance in excess of $22 million on July 31, 2012 is to be refunded on a pro rata basis to those farmers who used pricing options in 2010-11 and 2011-12.
The federal government is to provide no capital funding to the existing or new CWB.
The federal government is to continue to guarantee the initial payments to producers from the CWB pool accounts for three years, ending Aug. 1, 2015. This will give the CWB the ability to buy and sell grain until it establishes a capital base sufficient to finance the purchase and sale of grain.
The shareholders of the new CWB will decide, by resolution, the extent and manner in which the CWB will raise additional capital, whether via a share offering and/or a voluntary cash ticket deduction.
ACQUISITION OF CAPITAL ASSETS
The new CWB will have the power to acquire any real property (e. g. primary or terminal elevators) or personal property (e. g. rail cars, ships), providing such assets are financed through privately raised capital or borrowings against that capital. The federal government guarantee is limited to borrowings to acquire grain.
TRADING IN OTHER CROPS
The new CWB is permitted to buy and sell any grain, however the government guarantee on borrowings is only to be used to finance the purchase of wheat and barley. The purchase of any other crops is to be financed by privately raised capital.
The new CWB is permitted to buy or sell any grain after August 1, 2015.
The new CWB is permitted to pool grain or purchase grain on a cash or forward basis.
The pool account sign-up deadline should be Oct. 31 of each year, or such date as the CWB board of directors may establish.
The new CWB is permitted to be a shipper of grain and gain access to rail cars on the same basis as any other shipper. The CWB is free to enter into commercial agreement with any grain company with respect to the shipment of grain.
The new CWB will be free to enter into negotiations with any grain company or service provider for handling and shipment. No grain company or business is obligated to acquire grain on behalf of the CWB. Railways are required to furnish rail cars to the CWB as required under the level-of- service provisions of the Canada Transportation Act.
The federal government should assume all costs associated with the windup of the existing CWB (e. g. employee severance, contract cancellations). Transition costs (e. g. restructuring of the CWB into a share capital firm) should also be borne by the federal government.
Prior to August 1, 2012, the existing CWB is to have the ability to enter into any agreement for the purchase or sale of wheat and barley on or following that date, with any such agreements binding on the new CWB.
Upon royal assent of the new legislation, any licensed elevator or grain dealer would have the ability to enter into any agreement for the purchase or sale of wheat and barley occurring on or after August 1, 2012 without the permission of the CWB.
Prior to royal assent, any licensed elevator or grain dealer would have the ability to enter into any agreement for the purchase or sale of wheat and barley occurring on or after August 1, 2012 if either of two conditions are met:
i ) The elevator or grain dealer has received permission from the CWB.
ii) The contract for the purchase or sale is conditional upon the implementation of an open market.
As of Aug., 2012, the CWB will no longer be obligated to deduct and remit checkoffs on behalf of the Western Grains Research Foundation. The Wheat Growers recommends that, for a one-year period, starting Aug. 1, 2012, the federal government remit the amount of funds to the WGRF that would have otherwise been collected by the CWB. A new funding model to be in place by Aug. 1, 2013.
As of Aug. 1, 2012, the CWB will no longer be obligated to administer the federal cash advance program for wheat and barley producers. Responsibility for administering the cash advance program should be transferred to a commodity association.
As of Aug. 1, 2012, the CWB will no longer be obligated to provide funding to the Canadian International Grains Institute and the Canadian Malting Barley Technical Centre. The Wheat Growers recommends that, for one year starting Aug. 1, 2012, the federal government remit the funds that would have otherwise been provided by the CWB. New funding model to be in place by Aug. 1, 2013.
On Aug. 23 the Western Canadian Wheat Growers Association put forward a position paper outlining the structure of an open market and a new Canadian Wheat Board. It recommends the CWB lose its monopoly on Aug. 1, 2012, but continue as a buyer and seller and receive government guarantees on initial payments until 2015. Farmers would receive shares based on previous deliveries, and that the federal government should assume all costs associated with the windup of the existing CWB. A summary of the paper follows.
Tohelpensureasmoothtransition,theexisting boardofdirectorsistobereplacedbyaprovisional boardtobeappointedbyJan.31,2012.