Key Events Could Change Markets

VANCOUVER - Nov 2/07 - SNS -- Two significant events happened outside the pulse industry during the past week, which could have affect future demand and the capacity of pulses to compete for the attention of farmers in western Canada by 2009.

The key political event was the passage of the federal government's mini-budget by parliament. While opposed by the Liberals as a matter of principle, they abstained from voting on the resolution. It cut the goods and services tax (GST) one point to 5%, and reversed personal income tax increases imposed by the Conservatives when they initially cut the GST from seven to 6%.

The Liberals opposed the GST tax cut, saying they favored targeted spending and income tax reductions. The unwillingness of the Liberals to face the Canadian electorate on a matter of principle -- which is the only valid reason to defeat a minority government -- has effectively given the Conservatives a parliamentary majority.

This is significant for agriculture because of the ongoing war between the federal Cabinet and the Canadian Wheat Board (CWB). At this point, it is only over stripping the CWB of its monopoly over malting barley marketing and feed barley exports. Federal courts over-turned a Cabinet order created a dual market, saying the CWB Act could only be amended by Parliament.

By making the amendments a matter of confidence, the Conservative government stands a good chance of pushing through any amendments it wants to make to the CWB Act, including removing its monopoly status on wheat, without forcing an election. While it would be opposed by the New Democratic Party and Bloc Quebecois, the Liberals could once again abstain from voting and be put in a position where their power to amend the proposed changes to the Act would be neutralized.

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