A Manitoba court dismissed the last remaining lawsuit stemming from the end of the Canadian Wheat Board's monopoly, which sought more than $91 million for producers. The judge found that Minister Gerry Ritz acted within his authority.
A Manitoba court dismissed the last remaining lawsuit stemming from the end of the Canadian Wheat Board (CWB) monopoly, an action that sought more than $91 million for producers who sold through pool accounts in the final two crop years under the single-desk system.
Justice Chris Martin of the Manitoba Court of King's Bench dismissed the action on Oct. 7 and granted summary judgment in favor of the federal government and G3 Canada Ltd., the CWB's successor. Farmer Edward Andrew Dennis filed the lawsuit in Manitoba in 2017 on behalf of producers who sold through pool accounts between Aug. 1, 2010, and July 31, 2012.
The claims concerned up to $85.3 million in gains from non-pool marketing programs credited to the CWB's contingency fund and a further $5.88 million in expenses charged to pool accounts. The contingency fund protected against losses from non-pool programs; gains exceeding its regulatory cap could be transferred to pool accounts and contribute to payments to producers.
The farmers alleged that then-Agriculture Minister Gerry Ritz had improperly raised the fund's cap and directed money into it to help capitalize the CWB's transformation into a private grain company. They also argued that the CWB had breached contractual obligations to producers.
Martin rejected those arguments. He concluded that the minister acted within his authority both to protect the CWB's finances during its final year of monopoly and to prepare it for its subsequent operations. "I also disagree the evidence shows bad faith, dishonesty or egregious intentional misconduct by the minister," the judge wrote.
He also determined that the grain receipts on which the contractual claim relied documented a statutory relationship rather than a contract. Even if a contract had existed, he concluded that the CWB had complied with the legislation and had not breached it.
The farmers also challenged $5.88 million in employee retention payments charged to pool accounts. They argued that those costs arose from the CWB's transition to a private company and that farmers should not have to bear them. Ottawa considered the payments operating expenses and refused to pay them. Martin ruled that, under the legislation governing the CWB, those expenses had to be paid from farmers' grain returns.
The judge further noted that the board's apparent lack of objection to the accounting treatment of the 2010-11 funds was telling. "It is also incredible that the farmer-dominated board would allow this, let alone without any comment or objection, unless they understood it was proper," he wrote.
Former director Kyle Korneychuk, a National Farmers Union member, rejected Martin's interpretation and maintained that the directors had tried to distribute the contingency fund money among farmers but were blocked by a federal directive. "We didn't sit idly by. We fought minister Ritz tooth and nail," he said.
"I think the simplest thing to remember is the wheat board was a farmer's selling agent. All revenues made were owed to that group, the farmers," Korneychuk added.
As for a possible appeal, Korneychuk said he did not know whether the plaintiffs would file one. "As far as I know, they're still reviewing it," he said. Louis Century, counsel for the plaintiffs, did not respond to an email asking whether they intended to appeal. The Wheat Growers Association, a strong advocate of ending the CWB's single-desk system, also did not respond to requests for comment.
