Supreme Court kills $17-billion suit to compensate farmers for scrapped wheat board monopoly

However, legal action concerning allegations farmers’ money was wrongly used 
to restructure the post-monopoly board can continue

The Supreme Court of Canada has quashed efforts to mount a class-action lawsuit claiming $17 billion in government compensation for the Harper government’s decision to end the Canadian Wheat Board monopoly.

The court last week ruled it would not hear an appeal of a lower court’s decision last October to throw out most of the claim mounted by four farmers — Harold Bell of Fort St. John, B.C., Andrew Dennis of Brookdale, Man., Nathan Macklin of DeBolt, Alta., and Ian McCreary of Bladworth, Sask. — in Feb. 2012.

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CWB sign

While the $17-billion class-action lawsuit is dead, the farmers can still try to sue Ottawa and the board for allegedly using farmers’ money to help the board transition to an open market, said Stewart Wells, a former farmer-elected wheat board director, Swift Current, Sask., farmer and chair of the Friends of the Canadian Wheat Board, an organization helping to raise funds for the lawsuit.

“That’s the part that’s left now,” Wells said in an interview.

“Now we’re looking at tens of millions or hundreds of millions of dollars (in claims) not billions.”

Whether this part of the proposed class-action lawsuit is pursued hinges on the discovery process ahead of it uncovering evidence, Wells added.

In June 2012, Agriculture Minister Gerry Ritz said the federal government would give the wheat board $349 million to help it restructure. The money was to cover board employee severances, pensions and expenses related to fixed costs farmers weren‘t expected to bear.

“I don’t believe the government when it says it has put in more than $300 million in taxpayers’ cash to the CWB,” Wells said. “There’s just no evidence.”

Wells and other elected directors also suspect wheat board managers were “trying to build a nest egg” for the post-monopoly board before the legislation became law.

Ritz welcomed the Supreme Court’s decision and said most farmers support an open market.

“These frivolous lawsuits are nothing more than desperation from a dwindling few who will always be stuck in the past,” he said in an email when asked about the possibility part of the suit could still continue.

“While a small few await the next full moon, our government will continue to work with forward-thinking producers to expand opportunities for the sector.”

The farmer-plaintiffs and Friends of the Canadian Wheat Board are disappointed by the Supreme Court’s decision, Wells said.

“The changes made to grain marketing by the Conservative government have resulted in the largest transfer of money away from farmers in the history of Canada,” he said.

It’s estimated western farmers lost $4- to $5 billion based on the value of grain exports at the West Coast versus what farmers were paid inland. A backlog in grain shipping was blamed for the gap.

“It’s what we predicted would happen,” Wells said. “The companies have just started to flex their muscles and understand what market power they have really gained.”

Open-market supporters argued grain-shipping problems would have occurred even if the board’s monopoly had existed.

The $17 billion being sought in the class-action lawsuit was based on the value of the wheat board’s monopoly estimated by some to be around $700 million a year, plus the value of the board’s assets, including its office building in Winnipeg and around 3,000 hopper cars.

The board used to return around 90 per cent of the export price to farmers, according to Wells, while last year farmers were lucky to get 50 or 60 per cent.

Wells hopes opposition parties will pledge to compensate farmers if they form the next government. And if not for the full $17 billion at least for the board’s hard assets, which farmers paid for through their grain sales, Wells said.

About the author

Reporter

Allan Dawson

Allan Dawson is a reporter with the Manitoba Co-operator based near Miami, Man. Covering agriculture since 1980, Dawson has spent most of his career with the Co-operator except for several years with Farmers’ Independent Weekly and before that a Morden-Winkler area radio station.

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