Court strikes down several claims in wheat board lawsuit

OTTAWA -- The federal court has struck down most of the claims in a lawsuit by supporters of the old Canadian Wheat Board, but the case is still moving forward.

Board supporters are seeking $17 billion for damages they claim were caused when the federal government ended the CWB's monopoly over western wheat and barley sales.

Justice Daniele Tremblay-Lamer struck several claims, including those of expropriation and unlawful interference with economic relations.

On the expropriation issue, the judge basically said there has been no transfer of property.

"In sum, and unfortunately for the plaintiffs, the loss of a single desk due to the change in the regulatory scheme is not enough in itself to claim a loss of a property interest," she wrote in the decision.

Tremblay-Lamer said the claim for mismanagement can continue with a revised statement of claim.

On the mismanagement issue, board supporters say the government and the new CWB leadership used money that should have been paid to farmers to cover the transition when the marketing monopoly ended.

Board supporters argued that they have a proprietary interest in the assets and goodwill of the CWB.

The supporters also claim the government interfered with their economic relations by ending the single desk marketing system, which they said got them a premium price for their grain.

Federal Agriculture Minister Gerry Ritz said in a news release Thursday that the ruling underscores the rights of Western Canadian farmers to market their own grain.

"While courts continue to strike down these frivolous lawsuits, the fact remains that the overwhelming majority of Western grain farmers have embraced marketing freedom and are capitalizing on new economic opportunities that were impossible under the old single desk," he said.

The government filed a motion last August asking for the claim to be struck and the proposed class action dismissed.

One of the arguments it made was that while producers had the right to elect wheat board directors from 1998 until 2011, they were never shareholders and had no right or interest in the property of the CWB.

Producers were simply entitled to payment for the grain they sold, the government said.

Stewart Wells, former president of the National Farmers' Union and a former CWB director, said the decision means farmers have no claim on board assets.

The assets include rail cars and ships that were bought with money from farmers' grain sales, as well as a contingency fund that was partially financed by farmers' fees.

"So we're talking hundreds of millions of dollars of hard physical assets," Wells said from Swift Current, Sask.

"It's disappointing that the court so far has upheld the government's right to what I would term a legislated theft from farmers."

Wells, who also belongs to a group called Friends of the Canadian Wheat Board, said they may appeal or amend the claim.

Western Canadian producers had no choice but to sell their wheat and barley through the CWB since the 1940s.

Supporters said the approach ensured better prices and prevented farmers from competing against each other for sales. But other producers opposed the monopoly and wanted to sell to whomever they chose.

In late 2011, the federal government introduced legislation to end the marketing monopoly in time for the 2012 crop year.

In January 2013, the Supreme Court of Canada said it would not hear an appeal by eight former board directors, who accused the government of breaking the law by making radical changes to the CWB without first holding a plebiscite among grain producers.