National | Letters

2nd Letter to Auditor General re public expenditure on CWB privatization

In January 2018 the NFU wrote a letter to the Auditor General of Canada to request a public audit on post-2012 spending related to the Canadian Wheat Board. We recieved a response from him and have followed up with another letter, as follows:

April 25, 2018

Michael Ferguson
Auditor General of Canada
240 Sparks Street
Ottawa, Ontario
K1A 0G6

Dear Mr. Ferguson,

Re: Response to NFU request for audit of public expenditures related to post-Dec 2011 Canadian Wheat Board (CWB)

Thank you for your response to our January 31, 2018 letter. We would like to clarify that the National Farmers Union is not asking for an audit of G3; our request is for an audit of the Canadian Wheat Board (CWB) as it prepared for the transition to private ownershipbetween December 11, 2011 and July 31 2015. During that period certain public funds were transferred to the CWB and the taxpayers of Canada were still guaranteeing CWB’s liabilities. We also note that the Final Report of the House of Commons Standing Committee on Finance regarding its Consultations in Advance of the 2016 Budget made the following recommendation:

Recommendation 48
The federal government provide Western Canadian grains and oilseed farmers with a full and transparent accounting of the disposition of the Canadian Wheat Board’s assets since the Marketing Freedom for Grain Farmers Act received Royal Assent, and of the effects on the grain handling and marketing system since that time.

Thus we believe the audit we request falls under Section 11 of the Auditor General Act. In addition, we are aware that former Auditor General Sheila Fraser had the authority to conduct an audit of the CWB in 2002.

We are aware the federal government provided funding to the CWB for “CWB Transition Costs” comprised of at least $249 million allocated under a grant funding agreement and at least $62 million allocated in the form of a contribution agreement. These funds were to be paid out over several years. We believe the public is entitled to know what, if any, obligations were attached to these allocations and whether they were fulfilled. If these public funds were disbursed to the CWB without any obligation in return, that should be made known to the Canadian public as well. We respectfully request a full accounting of these allocations.

The NFU also requests a comprehensive audit of any disbursement of CWB assets – including artwork and the CWB’s library holdings — prior to its continuance as G3 between December 15, 2011 and the date ownership of the CWB was transferred to G3.

Your March 9, 2018 letter indicates the transfer of assets as a result of continuance of the CWB as G3 Canada “may have been reflected in the public accounts of Canada and may therefore have already been audited as part of the Auditor General’s audit of the federal government’s summary financial statements.” In light of this possibility, we request these audits be examined and relevant details shared with us, including the dollar amounts transferred to the CWB each year between December 15, 2011 and July 31, 2015, as well as any public dollars involved in formalizing the continuance of CWB to G3, any conditions attached to these transaction(s), and any amounts transferred from Canada to G3 subsequent to the continuance.

We understand that the Auditor General Act empowers your office to request any government documents, including Cabinet documents, if you need to access the full CWB audit reports to determine whether public funds were properly used.

Prior to the CWB being continued under the Canadian Wheat Board (Interim Operations) and Marketing Freedom for Farmers Act, the CWB was required to provide the Minister with an annual report of its purchases and sales of all grain during that crop year, the quantities of grain then owned by it, the contracts to take delivery of grain to which it is then a party, all securities then held by it and the financial result of the Corporation’s operations as at the end of that crop year and such further information as the Minister may require. This report had to be certified by the CWB’s auditors. The Minister was required to present this report to Parliament within the first 15 days of sitting after he or she received the report.

Under the Canadian Wheat Board (Interim Operations) Act, the CWB’s annual public audit and reporting obligation was kept intact, however the Minister was allowed to keep Parliament from seeing information if he believed it would be detrimental to the commercial interests of the CWB if published. Because the CWB no longer exists, there is no longer any need to withhold information to safeguard its commercial interests. Thus, we believe the financial information relevant to our request has been documented, is no longer commercially sensitive and would be in the possession of the Minister of Agriculture, and therefore accessible to you under the authority of the Auditor General Act.

Thank you for your attention to our request. We look forward to your response.

Coral Sproule,
President, National Farmer Union

CC: Hon. Wayne Easter, Chair, House of Commons Finance Committee