Saskatchewan farmers have been continually
ignored in Canada's institutional
landscape. Never has the situation been more evident as
it is with the possibility of
Quebec
separation. The Canadian governments
ignorance of farmers' needs has caused a
cynical view of
the political process in the eyes of farmers.
One of the major sources of
the cynicism is
that Canadian federal institutions are developed so that most political of the
clout is
developed from the east. The eastern
domination of the House of Commons, and
indirectly the
Senate, means that Saskatchewan wheat farmers do not have a strong voice
in Canadian
political decisions. But what does the
Saskatchewan lack of representation in
Canada's
political institutions in Ottawa mean?
What can Saskatchewan wheat farmers do
to rectify the
situation? And, following a Quebec separation what can wheat farmers do to
uphold their
livelihood?
The intent of this report is
to focus on the actions Saskatchewan
wheat farmers can
take to ensure their success in the future.
A focus on the recent
political policy
decisions by the federal government, the need for intrastate institutional
reform, and
effects of a possible Quebec separation will all be analyzed.
The current institutional landscape of Canada
has not acted favorably for
Saskatchewan
wheat farmers. The development of the
institutions, ie. the House of
Commons and the
Senate, and the policies that have developed from these institutions
have continually
ignored the needs of prairie farmers, emphasizing the cynicism
Saskatchewan
wheat farmers have towards the political process. The antipathy towards
the political
institutions has developed because of
recent cost-cutting initiatives and
deregulatory
procedures by the government and by mis-representation of farmers' needs in
government
today. The failure of Saskatchewan wheat
farmers to express their needs in
the Canadian
political arena successfully, when compared to other constituencies, is based
on the fact that
Saskatchewan's representation in Canada's political institutions is weak.
The result is the
development of policies contrary to what would be accepted by farmers.
Saskatchewan wheat farmers, in accordance with
most constituencies in the west,
have desired a
institutional change to the Upper House in Canada. In 1867, when the
institutions were
developed, the goal was to develop two different political
"bodies". One,
the House of
Commons, would represent the Canadian people by means of elected
representatives
in a representation by population scenario.
The second, the Senate, would
be a source of
"sober second thought." In its
creation the senate was intended to protect
the ideals of
individual regions. However, to the
chagrin of Saskatchewan wheat farmers,
the intended
regional focus of the senate never developed and, hence, the senate has been
an institution
that has been the focus of a lot of antipathy from the West. The drive for
modifications to
the Senate has been pressed by Saskatchewan wheat farmers in an
attempt to uphold
their livelihood in a nation in which they're ignored.
The development of intrastate federalism in the
senate is typically the most desired
institutional
change. Intrastate federalism aids in
bringing regional representation to the
national
political arena. The desire for regional
representation in the Senate is held in high
demand by
Saskatchewan wheat farmers. The most
prominent suggestion is for a Triple E
senate (equal,
effective, and elected) instead of the current form of the Upper House.
Support for a
Triple E senate is virtually guaranteed by Saskatchewan wheat farmer,
because their
views would have better representation in a central political institution which
historically has
ignored their needs. The reasoning
behind the lack of regionalism in the
Canadian senate
is based on two important factors.
"First, Canadian senators were not
selected by
provincial legislatures or governments, but rather were appointed by the
federal
government... Secondly, Canadians opted for equal representation by region
rather
than equal
representation by province."
Thus, the senate's actions are extremely similar
to the actions of
the House of Commons.
To answer the question of what Saskatchewan
wheat farmers need to do to uphold
their livelihood
concentrates on the necessity for a senate reform based on intrastate
federalism. The hope is that by doing so Saskatchewan
farmers would have a strong voice
in the national
political arena. However, modifying the
senate is an extremely arduous
task. Senate reform would most likely have to
follow the current amending formula of the
seven-fifty
rule. The seven-fifty rule declares that
any amendments made to the
constitution have
the support of two-thirds of the provincial legislatures (seven, in the
current
Confederation) containing fifty percent of the population agreeing to the
modification. The modifications would be difficult to
achieve because the politicians in
the east, who
currently hold a lot of the clout in the current landscape, would be opposed
to any changes
that would see them lose power. Upon
Quebec separation senate reform
would be even
more difficult to achieve. Without
Quebec, Ontario currently has 49.8% of
the remaining
population. According to Statistics
Canada demographics from July 1st,
1996. So, using
the current amending formula without Quebec in confederation , the
likelihood of
Saskatchewan farmers having a voice in central political institutions becomes
even less likely
as modifications to the institutions would only be possible if all the
provinces,
besides Ontario, were in favor of the change.
Without provincial representation in a central
institution the needs of
Saskatchewan
wheat farmers will be continually ignored as the provinces with the largest
population
continue to develop policies to achieve their own goals. One suggestion has
been modification
to the House of Commons, however, this seems even more unlikely
then reform to
the Upper House. The goal of the senate in
its creation, as was noted
earlier, was to
provide "sober second thought."
Regional leaders can argue that the senate
does not fulfill
the goals it was created to attain, and hopefully modify the senate to attain
the regional
needs they desire. The House of Commons
intent was always to be an elected
body that was
selected through representation by population and, thus, modifications to
the House of
Commons are less likely then changes to the Senate because the intentions of
the House of
Commons have been achieved.
The fact that the institutional landscape in
Canada currently favors the east can be
seen in three
recent policy initiatives by the federal government. The policy changes have
not been
beneficial to farmers in Saskatchewan, and continue to be focused on what will
help the east
develop. The policy changes have
involved 1) the elimination of the
monopoly the
Canadian Wheat Board had; 2) deregulatory initiatives involving the
creation of the
North American Free Trade Agreement (NAFTA); and, 3) a cost-cutting
policy initiative
that saw the elimination of the Crow's Nest Pass Agreement. Each policy
change has caused
deep cuts at the roots of Saskatchewan
wheat farmers. A focus on the
policy changes
shows that the policies have gained some support in other provinces,
namely Alberta,
but the policies have considerably hurt Saskatchewan farmers.
Making modifications to price-support systems,
such as the Canadian Wheat
Board (CWB), is
not a pragmatic solution in the minds of Saskatchewan wheat farmers.
Price-support
systems have always been supported by Saskatchewan wheat farmers but
recently Alberta
wheat farmers have complained that the CWB is not effective and elected
for a free-market
system. Currently, the CWB operates under
a pooled-payment system in
which,
"Farmer's are currently paid an average price based on the board's sales
profits."
The strength of
the CWB in Saskatchewan was firmly developed in the CWB's ability to
rescue farming
life during the Depression of the 1930's.
It is for that reason that many
Saskatchewan
wheat farmers are skeptical of losing the CWB and the possibility of
returning to a
financially insecure market, as was prominent in the 1930's.
For any change to be made by the federal
government there has to be support for
the change in
some part of the country. In the case of
developing a free-market system
most of the
support came from Alberta wheat farmers.
Alberta wheat farmers support a
free market
system because of the recent high prices which are not reflected in the CWB,
as it sets a
moderate price so that it can support farmers in times of trouble. Desiring to
take advantage of
the high prices Alberta wheat farmers seemingly ignore the problems
that a
free-market system brings with it, especially in the fluctuating market that
would
likely develop
following Quebec separation. Both the
price-support and free-market
systems have
there pro's and con's and perhaps only time will tell which system is more
effective. Alberta farmers, however, were not affected
by the Depression as much as
Saskatchewan
farmers which is much of the reasoning behind the support for the CWB.
The development of Free Trade has been another
deregulatory concept that has
been detrimental
to Saskatchewan wheat farmers. The
passing of the Canada-United
States Trade
Agreement (CUSTA), which has since developed into the North American
Free Trade
Agreement (NAFTA), has caused the agricultural economy to drop
considerably. The National Farmers Union 1991 statement
assists in highlighting the
effects that free
trade has had on farmers. For example,
milling wheat for consumption
was $7.00 per
bushel before the introduction of CUSTA and almost instantly the price
dropped to $3.75
per bushel. The current price is now
$3.10 per bushel. The net loss
forced
unwillingly on the prairie wheat farmers was $300 million dollars. The loss of
which is certain
to have a detrimental effect on the lifestyle and progress of Saskatchewan
wheat
farmers.
With the continuing focus of the east towards
free trade and the loss of power held
by the CWB, the
international market becomes very important.
A focus on the
international
market is extremely important as it highlights the effects of Saskatchewan
farmers as the
market proceeds in its current direction.
The competition that is waged
between the
United States, European Community, and Canada causes the price of wheat
to drop due to
the elasticity of wheat on the world market.
Wheat is an elastic
commodity,
especially with the inception of free-trade, because of the vast number of
available
substitutes. What the elasticity of
wheat means to Saskatchewan farmers is that
any price changes
will have a serious effect on the quantity of goods bought by
consumers. With even a modest price increase consumers
will simply look elsewhere for
wheat, an option
available to them because of Free Trade.
The result is a drop in prices as
the competition
looks for means to attract the masses towards their product.
Unfortunately for
farmers the low prices mean low profits, and a deprivation of their
livelihood. Quebec separation would develop yet another
arena of competition from
Quebec farmers,
despite their small numbers. The
argument that Canadian farmers would
be successful in
a free-market system where they can compete with international
competitors is
false. The elasticity of wheat means
that, even if Canadian farmers were to
become the
largest wheat suppliers in the world, they would do so only with low prices
and insignificant
advantages to Saskatchewan wheat farmers.
One recent federal cost-recovery initiative
involved the abolition of the Crow's
Nest Pass
Agreement. The agreement was arranged in
1898 when the Canadian Pacific
Railway was
granted "a $3.3 million subsidy to build a railway over the Crowsnest
pass...In return,
the CPR agreed to reduce in perpetuity its eastbound freight rates on
grain." In practice, the Crow, as it was commonly
referred too, protected wheat farmers
from outlandish
high transportation costs that the CPR previously used in the prairies to
cover its
expensive maintenance costs in the Rocky Mountains and Lake Superior areas of
Canada. With the elimination of the Crow on August
1st, 1996 a modest increase in the
cost of
transportation costs placed on farmers to $15 a tonne was seen. "To soften this
blow, the federal
government [shelled] out $1.6 billion in land payments to farmers and
[spent] $300
million improving the transportation system." Unfortunately for farmers,
the one-time
support of the federal government after the crow will not prevent continuing
transportation
prices in the future. With the death of
the Crow, small railways and grain
elevators will
shut down in favor of larger and more centralized means of collecting and
preparing grain
for transport meaning that small-scale farmers will have to travel farther
with their wheat
to get it off to market. Additionally,
as the quasi free-market develops,
an expectation
for lower wheat prices gives the small-scale farmers another slap-in-the-
face. One author predicts, "...hundreds of
miles of railway track will be abandoned, scores
of elevators
close, large swathes of farmland will be returned to native grasses and dozens
of small
communities will die as development shifts to larger regional
centers."
The abolition of the Crow has gained a small
amount of support from farmers in
Alberta. The reason being that the transportation
costs will not affect the farmers as bad
as they will in
Saskatchewan and the development of
large regional centers, already
present in
Alberta, will bring new initiatives and diversity. In the meantime, the
Saskatchewan
wheat farmers have been forced to sacrifice their lifestyle to survive in a
new economic agenda
pushed by the bureaucrats in the east and by an open market
competition to
the south. Survival for the common
farmer in Saskatchewan has become
increasingly more
difficult as the federal government continues on its policy changes based
on the idea that
bigger is better, to the demise of the common farmer.
One of the alleviating factors during the
abolition of the crow was the possibility of
Saskatchewan
wheat farmers to use the St. Lawrence Seaway as a means of finding lower
costs to
farmers. However, with the possible
separation of Quebec, the use of the St.
Lawrence Seaway
is unknown. Depending on the agreements
made by the Quebec and
Canadian
governments following separation the price of transportation may go up even
further as
Saskatchewan wheat farmers would lose a possible location to ship their grain.
This would
assuredly cause an influx of prices in transportation costs to farmers as the
Canadian Pacific
Railways would undoubtedly continue its trend of charging high prices to
prairie farmers
transporting their goods to the west, to combat the expenses of getting
through the
treacherous Rocky Mountains.
Exports are a concern to Saskatchewan farmers
on a whole, but more so to those
involved in the
egg, poultry, and dairy aspects of agriculture.
Egg, poultry, and dairy are
produced under a
Supply/Management organization. In other
words, there is a strict
management of
goods to ensure that farmers produce only what will satisfy domestic
needs. When the system works efficiently no
surpluses or shortages of egg, poultry, and
dairy are created
in Canada. If Quebec were to separate,
especially with Quebec being a
primary dairy
producer in Canada, a number of initiatives would need to be developed to
ensure that there
is neither a shortage or surplus of goods.
The repercussions of this
would involve the
need for farmers in Saskatchewan to focus more on dairy production,
so that the needs
of the nation are matched. Also, egg and
poultry producers in
Saskatchewan may
be down-scaled or forced to close as the goods they produce would no
longer be needed
by the rest of the country. To prevent
any developing problems it is
imperative that
the Saskatchewan farmers have some voice in the political discussion
following a
Quebec separation. Theoretically, we
could simply import from Quebec after
separation is
made to ensure that the demand of Canadians are met by Quebec supply.
However, the
solution is not an easy one because the cost of dealing with Quebec would
likely be a high
one due to an increase in transaction costs.
Transaction costs are, "the
costs arising
from finding a trading partner, negotiating an agreement about the price and
other aspects of
the exchange, and of ensuring that the terms of the agreement are
fulfilled." Simply put there would be an influx in the
transaction costs between Quebec
and Canada as the
trading agreement is modified. Again
Saskatchewan farmers, upon
Quebec
separation, are faced with yet another hurdle to clear in their attempts to uphold
their lifestyle.
In sum, the political policy development that
has been developed in the East has
seriously
effected Saskatchewan wheat farmers.
They have lost a means for protection
from a
fluctuating market because of modifications to the price-support structure of
the
CWB, which could
be extremely detrimental with the development of a new country and
unstable
economy. The international competition,
witnessed through the eastern
politicians focus
for free trade, has caused the price of grain to drop considerably because
of the elasticity
of wheat caused by an increase in competition and substitutes. Finally, the
rising
transportation costs, due to the elimination of the Crow's Nest Pass Agreement,
has
meant that
Saskatchewan wheat farmers spend more money to get their product to a
market which has
gotten progressively worse. Saskatchewan
farmers are forced to spend
more money to get
their product to a weak market, which could get weaker in a new
developing
country due to an unstable economy and the increase in transaction costs.
The importance of the institutions ability to
steer Canada's policy needs to be
analyzed here to
ensure its power and importance is understood.
"Institutions are like
channels or
grooves along which economic, ideological, cultural and political forces
flow." Simply, the power of political institutions
is not an abstract quality . With the
branches of
government built under the principle of representation by population the
political clout
is going to be held where the largest population is held, the east. The result
is that of small
constituencies are weakly represented in national governments which fail to
realize the
practical implications their policy developments have to constituencies not
prominent in the
east, such as Saskatchewan wheat farmers.
The policies the national
government have
developed in recent events have spoiled the agricultural community in
Saskatchewan. However, a change to the political
institutions would cause a change in
the policies that
the governments created simply because the "grooves" would cause
policies to
follow a different political, cultural, and economic flow.
Canadian political institutions have a serious
effect on policy development in the
nation. With the power being held almost solely in
the east small constituencies, such as
Saskatchewan
wheat farmers are forced to concentrate on methods to modify the
institutions so
that they serve their needs. Recent
policy developments have had a
detrimental effect
on Saskatchewan wheat farmers growth and the only means for farmers
to prevent this
in the future is to modify the institutions.
However, Quebec separation
poses a difficult
problem for Saskatchewan wheat farmers.
Not only does separation
mean that the
economy farmers rely heavily on will drop but it separation also means that
institutional
reform is even less likely. The
situation is not futile, and although the road is
a difficult one
Saskatchewan wheat farmers have faced adversity before. It appears that
their unity and
strength will be called upon again as they attempt to gain representation in
Canada's national
institutions before their lifestyle becomes a concept of the past.
Keith Archer
et al., Paramters of Power: Canada's Political Institutions.
Scarborough:Nelson
Canada (1995), pg. 180.
Canadian
Dimensions- Population and average growth rates, Canada, the provinces, and
territories." Statistics Canada, Ottawa, Ontario, July 1st,
1996. Web site:
http://WWW.StatCan.CA/Documents/English/Pgdb/People/Population/demo02a.htm
David
Roberts, "Farmers worry report won't bring change," The Globe and
Mail (July
11, 1996), A9.
Terry
Johnson, "After the Crow, new hope in the country," Alberta Report
(August
21st, 1995), 15.
Richard Gwyn,
"End of an Era," Calgary Herald (August 1st, 1995), A5.
Terry
Johnson, "After the Crow, new hope in the country," Alberta Report
(August
21st, 1995), 15.
Robin Bade et
al., Economics: Canada in the Global Enviroment. Toronto: Addison
Wesley Publishers
Ltd. (1991), pg. G-13.
Keith Archer
et al., Paramters of Power: Canada's Political Institutions. Scarborough:
Nelson Canada
(1995), pg. 3.
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