Canada’s Institutional Landscape and The Governmen

t’s Ignorance of Farmer’s NeedsSaskatchewan 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.

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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.


Bibliography
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.


Category: History

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