It’s been five years since the Canadian Wheat Board (CWB) monopoly passed into history. Even so, according to the Edmonton Journal there are still some who long for the days when western farmers were required by law to deliver their wheat and barley (bound for export) to the government.
It was illegal under the CWB system for western farmers to grow wheat, mill it into flour, bake it into bread or pasta, and sell it. It was also illegal for a farmer to sell wheat directly to someone else who would mill and bake it.
The CWB was a misunderstood institution. For years, many falsely claimed it had been created to stop grain merchants from fleecing farmers. Others insisted it was an equalizer. Neither is true, unless making everyone a little poorer is the definition of equality.
The CWB monopoly was created for the specific purpose of holding down wheat prices during WWII. It was designed to restrict farm income and to save Ottawa a lot of money. During war, runaway prices are feared. To address this fear, starting in 1941, Canada’s government implemented a wartime price freeze. The price of everything—except wheat—was frozen solid. It was illegal to change a price.
Wheat was exempted because prices were low, and because the prairie provinces were still on their knees following the economic depression of the 1930s. The price freeze did apply to bread, so Ottawa paid Canadian bakers an offset subsidy. When price controls went into effect, wheat was 77 cents a bushel. As wheat prices rose, every penny of increase cost the federal treasury $2.5 million in baker subsidies.
Ottawa had also signed agreements with Britain to finance loans and help them buy food supplies. Consequently, every time the British bought Canadian wheat, Ottawa was required to shell out even more millions.
Two years after the wartime price freeze began, wheat prices stood at $1.23. The subsidy for bread consumers was costing over $100 million annually, while demanding bigger Canadian government loans to Britain for its wheat purchases. On September 27, 1943, federal politicians decided they would “protect” the federal treasury. Using the War Measures Act they ended the wheat market and created the CWB monopoly.
After the war, Ottawa entered into a series of five-year wheat agreements to supply millions of bushels to Britain at bargain prices (war reconstruction). Maintaining the CWB monopoly meant Ottawa could fulfil its agreements without worrying about market prices. The CWB forced farmers to deliver wheat at prices set by Ottawa.
At the time, Saskatchewan’s John Diefenbaker (later Prime Minister) was outraged, saying that whenever aircraft or war material had been given or sold to Britain, the Canadian manufacturer never paid for it. Why then were western farmers being compelled by law to personally finance British reconstruction? Yet this is exactly what occurred.
In 1947, Saskatchewan Senator Walter Aseltine calculated that in the first 3½ years of CWB operations, it cost western wheat growers $535 million in lost income. The monopoly itself was supposed to have been temporary, and therefore operated on five-year renewable parliamentary mandates right up until the 1960s, when the Liberal government quietly made it permanent. It was finally terminated by Stephen Harper, ten years after thirteen Alberta farmers had been imprisoned for the crime of selling their own grain.
Kevin Avram is a director of Grassroots Alberta www.GrassrootsAlberta.ca