Agriculture Minister Ritz is sanctimoniously outraged over the fact the Canadian Wheat Board (CWB) reported a miniscule loss in their contingency fund due to the global market meltdown. Of the record $8.418 billion in gross sales, the contingency fund loss was less than one percent. The contingency fund was established to backstop CWB producer payment options and it was envisioned that it could be in either a surplus or deficit position depending on the volatility of the markets.
Mr. Ritz is demanding the CWB Board invite the Auditor General (AG) to do a review of all aspects of the CWB operations. In 2001, at the invitation of the farmer elected Board of Directors, the AG did a complete review of the CWB. Obviously Ritz and his Parliamentary Secretary David Anderson either failed to read or to understand the previous AG’s audit. If they did, they would not be attempting to publicly undermine the financial credibility of the CWB. If their irresponsible attacks increase the CWB’s borrowing costs, this would cost farmers hundreds of millions of dollars. We can only hope that investors remember the AG gave high praise to the CWB just a few years ago and that Ritz’s comments have no credibility. In the 2001 audit, Auditor General Sheila Fraser stated:
"all revenues from the sale of grain, less operating costs were distributed to producers in accordance with the requirements of the Canadian Wheat Board Act and the CWB's price pooling policies."
"the CWB has a solid reputation as a strong and capable marketer of quality grains. Its key strengths include very good intelligence and market information, well-developed annual sales strategies and plans, competent and tough negotiators and good relations with customers…."
As a brand new board we invited her office to do a comprehensive audit of all areas of CWB operations including finances. During the 2001 review, the AG was confident that the CWB’s external auditors were doing a proper job. However the CWB Board and management insisted that the AG investigate all areas of CWB operations, including its finances.
Consequently her office spent about 11,000 person hours in the review. This required at least the same amount and in many cases double the time from CWB staff to supply the information. It was a very expensive and disruptive undertaking.
Mr. Ritz’s demand for another audit would simply be taking money from farmer’s pockets to find out what everyone in the real world knows: when the global market crashes, pricing option programs are risky.
Ritz should be thankful the farmer run CWB is such a prudent manager and competent marketer; and in fact returned record net revenue of $7.2 billion to farmers this last crop year. The taxes from this will help to pay for the multi-billion dollar Harper government bailouts to the private banks and auto companies. That is obviously an area of incompetence and greed where Ritz could mount his high horse and charge