Commission of Inquiry into Certain Allegations Concerning Commercial Practices of the Canadian Dairy Commission : The Commission of Inquiry Into Certain Allegations Concerning Commercial Practices of the Canadian Dairy Commission was established under Order in Council P.C. 1586, 25 May 1979, under Part I of the Inquiries Act (R.S.C., 1970, c.I-13) and on the recommendation of the Prime Minister. The Commission was mandated to inquire into and report upon certain allegations made by Schafer Bros. Ltd. and Mr. Michel Choquette in respect of dealings of the Canadian Dairy Commission, its officers and employees with Schafer Bros. Ltd., Montreal, during the years 1966 to 1977 in respect of the export from Canada of skim milk powder, and: (a) to define the issues raised by the said allegations; (b) to determine all relevant facts concerning the actions of the Canadian Dairy Commission, its officers and employees in their dealings with Schafer Bros. Ltd. during the years 1966 to 1977 relative to the export from Canada of skim milk powder; (c) to ascertain whether the Canadian Dairy Commission, its officers and employees have acted lawfully and fairly in their dealings with Schafer Bros. Ltd.; and to include in the report: (i) a recommendation as to whether any compensation should be paid to Schafer Bros. Ltd. and, if so, the basis on which such compensation should be determined, and (ii) such other recommendations as the Commissioner may deem appropriate. The commissioner was Hugh F. Gibson. The secretary was Marcel A.J. Dompierre.
The commission of inquiry into certain allegations concerning commercial practices of the Canadian Dairy Commission (CDC) resulted from charges made by Schafer Bros. Ltd. and Michel Choquette, both of Montreal, involving the relationship Schafer Bros. Ltd. had with the CDC for the export of skim milk powder from Canada to Mexico, and to other countries, during the years 1966-1977.
As early as 1968, David Schafer, and his son, George, complained to government officials that Schafer Bros. Ltd. was treated unfairly in its dealings with the CDC. From 1974 to 1977, Michel Choquette prepared detailed documentation on the grievances of Schafer Bros. Ltd. which he submitted to Prime Minister Trudeau, the Honourable Warren Allmand, Member of Parliament for Notre-Dame-de-Grâce (the riding in Montreal where Schafer Bros. Ltd. was located) and Gilles Choquette, Chairman of the Canadian Dairy Commission (no relation to Michel Choquette).
The grievances against the CDC, as represented by Choquette, were as follows:
"First there are complaints or allegations that, beginning in January 1968, the Canadian Dairy Commission was not even-handed or fair in the administration of its policies concerning the sale of skim milk powder and with respect to the public funds it controlled and could make available in the form of subsidies to private traders; that it took over the market or business developed by Schafer Bros. Ltd. with the Mexican government purchasing agency known as CONASUPO (Compania Nacional de Subsistencias Populares), that in connection with such taking over it favoured certain private traders who completed with Schafer Bros. Ltd.; and that in the process certain Canadian Dairy Commission officials received kickbacks from such private traders. Second, there are complaints and allegations that the Canadian Dairy Commission, a Crown agency, misconceived its role in respect of export sales of skim milk powder."
Michel Choquette was concerned about the apparent inability of Schafer Bros. Ltd. to secure redress of these grievances from the Department of Agriculture. It seemed to him that the various Ministers had relied too much on officials at CDC in making an evaluation of the complaints of Schafer Bros. Ltd. Choquette explained his involvement with the case of Schafer Bros. Ltd. as follows:
"Since there was no federal ombudsman in Canada, I decided to take the matter to the Prime Minister, the Rt. Hon. Pierre Elliott Trudeau, and to provide him as well as the Hon. Warren Almand and the then Minister of Agriculture, the Hon. Eugene Whelan, with whatever material I could prepare or assemble to assist these gentlemen in arriving at a proper assessment of Schafer Bros.' grievances. To this end I wrote what I choose to call Résumé A, primarily a historical account of Schafer Bros. negotiations with and sales to the governments of Cuba and Mexico and of the company's dealings in this respect with the Canadian Dairy Commission and its predecessor, the Agricultural Stabilization Board."
In 1977, Prime Minister Trudeau requested that the Department of Justice undertake an investigation of the allegations of Schafer Bros. Ltd. against the CDC. This investigation, which was completed in 1978, dismissed the claims of Schafer Bros. Ltd. The dismissal of the claims was completely unsatisfactory to Michel Choquette and Warren Allmand, who pressed for a more comprehensive and independent investigation. As a result, on 25 May 1979, Prime Minister Trudeau appointed a royal commission to inquire into and report on the dealings of the Canadian Dairy Commission with Schafer Bros. Ltd. during the years 1966-1977 (see Report of the Commission of Inquiry into Certain Allegations Concerning Commercial Practices of the Canadian Dairy Commission, Commissioner, the Honourable Mr. Justice Hugh F. Gibson, et. al., Supply and Services Canada, Hull, 1981, pp. 1-10 and pp. 199-201).
Hearings of the commission were held in Ottawa, Hull and Montreal from 23 November 1979 to 2 July 1980. The Commissioner also held informal hearings in Mexico City on 16-17 October 1980. There were 203 exhibits filed with the commission. RG33-127 General Inventory
