Agriculture and Agri-Food Canada

Agriculture and Agri-Food Canada

April 15, 2015 11:16 ET

Stronger CWB Increases Competition in Grain Sector

Deal marks final step in Marketing Freedom

WINNIPEG, MANITOBA--(Marketwired - April 15, 2015) - Agriculture and Agri-Food Canada

Today Agriculture Minister Gerry Ritz announced Government of Canada approval of a deal reached between CWB and G3 Global Grain Group which ensures CWB becomes a fully private and global competitor in the Canadian grain sector. With this deal, the Government has fully delivered on its commitment to Marketing Freedom by increasing marketing choice for Western Canadian grain farmers.

The deal will see the investor, a new Canadian company headquartered in Winnipeg, invest $250 million in CWB, with plans to develop a coast to coast grain processing and shipping network across Canada. Once fully realized, the growth associated with this deal is expected to increase Canada's grain export capacity and add hundreds of jobs and hundreds of millions of dollars of economic growth across the Prairies.

The stronger CWB will offer farmers the opportunity to build significant equity in a growing grain company by delivering their grain. Canadian farmers have the opportunity to financially participate in CWB through the continuation of the Farmer Equity Plan.

This deal will benefit Canada through increased competition in the Canadian grain market and significant Canadian ownership through the farmers trust.

Marketing Freedom and the commercialization of CWB is part of the Government's broader modernization of Canada's grain sector supporting the creation of jobs and economic growth for farmers and Canadians. It includes an aggressive trade and market access agenda, grain transportation and supply chain improvements and investments in science and research.

Quick Facts

  • The Marketing Freedom for Grain Farmers Act, which received Royal Assent in December 2011, allowed the CWB until August 2016 to present a plan for commercialization to the Minister of Agriculture.
  • G3 plans to build a coast to coast Canadian grain enterprise that will lead to increased job creation and economic growth across Canada.
  • Farmers will benefit from this deal by having another major company competing for their grain.
  • Canadian farmers will also have the opportunity to own equity in the CWB through the Farmer Equity Plan.

Quotes

"Our commitment to Marketing Freedom and increasing marketing choice has always been about giving farmers the right to sell their own grain to a buyer of their choice. The removal of the CWB monopoly attracted numerous investors wanting to expand Canada's grain capacity and supply chain. This investment deal offers Canadian farmers access to a new global player to compete for their grain and more delivery points for farmers to sell their grain. The result of these new investments and jobs will provide a huge economic benefit to the grain sector and Canada's overall economy."

- Agriculture Minister Gerry Ritz

"This deal will enable the CWB to continue to expand its network. CWB's investments to date translate into hundreds of millions of dollars in new investment and hundreds of jobs across Canada. It also establishes a major new player in the Canadian grain industry well into the future, and we look forward to furthering our relationships with farmers across Canada."

- Ian White, President and CEO, CWB

"It is a dynamic time for Canadian agriculture. As global demand for agri-products grows, consumers continue to demand the high quality grain produced by our Canadian farmers. Our vision is to establish a highly efficient coast to coast Canadian grain enterprise that provides stronger market access solutions for growers and delivers value to our stakeholders and the Canadian agriculture industry as a whole. We welcome the CWB team and farmer equity owners, and look forward to working together to build a new and dynamic company."

- Karl Gerrand, CEO, G3

Additional Links

- Marketing Freedom for Grain Farmers

- Initiatives Supporting Crop Producers

- Stronger CWB will increase competition in the grain sector and create jobs - Infographic

- The Path to Marketing Freedom - Infographic

- CWB

Follow us on Twitter: @AAFC_Canada

Media Information

- B-roll package for this announcement is available for media use

- Images are available for media use on AAFC's Flickr page

Background - The Commercialization of the CWB

Marketing Freedom

CWB has been preparing for commercialization since the Marketing Freedom for Grain Farmers Act was introduced in 2011. The Act gave CWB a deadline of August 2016 to submit an application for continuance to the Minister. CWB led its own process to commercialization. CWB and its corporate advisors established a strategy and timeline for commercialization that aimed to beat that deadline. The plan was to attract investment and other resources, not only to become independent of government, but to grow as a strong competitive option in Canada's grain sector.

CWB conducted an extensive worldwide search, engaging accounting and legal expertise to consider over 50 potential strategic investors. The successful bid offered the best price and alignment with criteria CWB set out for consideration to ensure the maximum benefit for farmers and the sector.

Modernization of the Grain Sector

Marketing Freedom is a key piece of the Government of Canada's overall modernization of the grain sector. Two and a half years into the open market, Canadian wheat is finding new customers in Asia, Africa and South America; shipments to the U.S. are at all-time highs and wheat exports are up almost 20 percent.

Other actions include:

  • passage of the Agricultural Growth Act to enhance global market opportunities and support innovation;
  • passage of the Fair Rail for Grain Farmers Act which took immediate action to deal with rail transport issues and longer term steps to improve the performance of the entire rail supply chain to help farmers get their crops to market through the Canadian Transportation Act Review;
  • an aggressive trade and market access agenda, including trade agreements with Europe and South Korea;
  • introduction of the Modernization of Canada's Grain Industry Act proposing changes to the Canada Grain Commission to improve grain quality and safety;
  • regulatory modernization and cutting red tape;
  • a modernized grain Variety Registration program, which along with improved Plant Breeders' Rights delivered by the Agricultural Growth Act, to ensure Canadian farmers have the best varieties of grain and other crops; and
  • research investments, including:
    • a collaboration with the province of Manitoba in a $20 million Grain Innovation Hub in Winnipeg that will grow Manitoba as a centre of innovation, and
    • over $73 million in grain-related research clusters, which build on earlier investments;
    • funding of $5 million to the Canadian International Grain Institute to create innovative applications and market-ready products developed from Canadian field crops including wheat;
    • participation in the Canadian Wheat Alliance, with $85 million in cash and in-kind contributions by the Government of Canada to coordinate and support research that will boost profitability for wheat producers.

Contact Information

  • Jeff English
    Director of Communications
    Office of the Honourable Gerry Ritz
    613-773-1059

    Media Relations
    Agriculture and Agri-Food Canada
    Ottawa, Ontario
    613-773-7972
    1-866-345-7972