The wheat board’s single desk must stay or western farmers should get $17 billion in compensation for its loss, says a class-action lawsuit launched Feb. 15 against the federal government by four farmers with the Friends of the Canadian Wheat Board (FCWB).
It’s the latest salvo in the fight against the Marketing Freedom for Grain Farmers Act. It became law in December, even though a Federal Court judge ruled Agriculture Minister Gerry Ritz introduced the legislation illegally.
There are several other legal challenges against the law underway.
The new law declares that on Aug. 1 the wheat board’s monopoly on the sale of Western Canada wheat, durum and barley destined for export or domestic human consumption ends.
The suit, being heard in Federal Court, is a two-pronged approach, said FCWB counsel, Anders Bruun, who is working with Toronto law firm Sack Goldblatt Mitchell LLP on the case. The FCWB alleges the federal government “infringed and denied” farmers their constitutional rights by creating an open market without farmers’ collective approval.
The wheat board ceased to be a Crown agency in 1998 when governance was turned over to a majority of farmer directors elected by farmers. Under Section 47.1 of the wheat board act the minister of agriculture is obliged to consult with the board’s directors and get farmers’ approval through a vote before changing the board’s mandate. Ritz didn’t do that.
“The right to associate to achieve collective goals and to develop a majority position is protected by Section 2(d) of the Canadian Charter of Rights and Freedoms,” the FCWB farmers say in their statement of claim.
The right of the majority of farmers to collectively market through a compulsory single desk is similar to the rights of workers that want to bargain collectively for better pay and working conditions, Bruun said in an interview.
The FCWB is asking the courts to rule the Marketing Freedom for Grain Farmers Act has no force, returning the board to farmer control and preserving the board’s single-desk authority.
If the court agrees, the FCWB wants the federal government to pay $3.75 billion to offset wheat board losses since the law was proclaimed.
However, if it doesn’t, the FCWB wants $17 billion in compensation for the estimated 70,000 farmers who have marketed through the board. Each farmer, on average, would get around $250,000.
The compensation requested is based on estimates that the board’s monopoly provides farmers with between $630 million and $850 million in additional revenue annually.
It also covers loss of the board’s assets, which the FCWB argues belongs to farmers.
There are precedents for compensation, including the $1.6 billion Ottawa gave western grain farmers in 1996 after it scrapped the Crow Rate grain transportation subsidy.
If the suit is approved as a class action, all farmers will automatically be part of the claim and eligible for compensation if awarded, so long as they don’t opt out, Bruun said.
The four farmer plaintiffs named in the suit are Harold Bell of Fort St. John, B.C., Andrew Dennis of Brookdale, Man., Nathan Macklin of DeBolt, Alta., and Ian McCreary of Bladworth, Sask.
Ritz said in a statement that it’s unfortunate a small group of farmers wants to prevent farmers from marketing their own crops.
“Marketing freedom is now law and farmers are moving forward, rightfully contracting their wheat and barley for August 1, 2012,” he said.
“Our government promised western Canadian farmers marketing freedom and we have delivered.”
The Producer Car Shippers of Canada, the Canadian Wheat Board Alliance and National Farmers Union support the FCWB’s suit.
The FCWB, along with the wheat board itself and eight of its 10 elected directors, argued successfully in Federal Court Dec. 7 that Ritz introduced the Marketing Freedom for Grain Farmers Act illegally. Ottawa is appealing.
Regina lawyer Tony Merchant launched a $15.4-billion class-action lawsuit against the federal government Jan. 10 in anticipation of the board losing its single desk.
On Jan. 18, eight former farmer-elected wheat board directors argued before a Manitoba Court of Queen’s Bench judge that Ritz’s law should be put on hold until its legality is determined. They also argued the court should scrap the law because it was introduced illegally. The judge has yet to render a decision.