Canadian Wheat Board Filing Lawsuit on Anti-Monopoly Bill

The Canadian Wheat Board plans to file a lawsuit to halt a government bill aimed at ending the organization’s marketing monopoly in place since 1943.

The suit also will ask the court to stop the legislation from going into effect until the case is decided, Allen Oberg, the board’s chairman, said today on a conference call with reporters.

Canada’s Federal Court ruled on Dec. 7 that the proposed bill to abolish the monopoly was illegal because the government didn’t first conduct a vote among farmers on the issue. Agriculture Minister Gerry Ritz has said the legislation, which would open the market by Aug. 1, is moving ahead.

“Our aim is to restore farmers’ right to vote on changes to the Canadian Wheat Board, so farmers can decide themselves how their wheat and barley should be marketed,” Oberg said. The government “is trying to seize control away from farmers and render them powerless,” he said.

The board may file its lawsuit today in Provincial Court in Manitoba, anticipating that the court may decide by Dec. 16 on whether to stop implementation of the bill, Maureen Fitzhenry, a spokeswoman, said in an e-mail.

The board has asked Canada’s Governor General David Johnston to refrain from giving royal assent to the legislation, the last step before a bill becomes law, based on the Federal Court’s decision, Oberg said.

‘Reckless Action’

The board’s new lawsuit is a “desperate and reckless action,” Agriculture Minister Ritz said in a statement. The government filed an appeal to the Federal Court’s ruling last week.

“Our government remains focused on passing this vital legislation and giving prairie farmers the marketing freedom they demand and deserve,” Ritz said in the statement. “Our government will make sure that every farmer has a choice in how they market their grain, regardless of whether that’s individually or through the Canadian Wheat Board.”

Canada’s House of Commons passed the bill on Nov. 28, and the legislation awaits a vote in the Senate, as well as royal assent.

‘Future of Democracy’

“We have one decision from the court that says how the government has acted is contrary to the law,” Canadian Liberal Party interim Leader Bob Rae said on the conference call. “This really is an issue about the future of democracy in Canada, and particularly in Western Canada. I hope very much that people will understand what’s at stake.”

Wheat and barley farmers in Canada’s main growing region have been required to sell all crops meant for human consumption to the board for almost seven decades. Prime Minister Stephen Harper’s Conservative government, which controls both houses of Parliament, has argued that an open market would spur investment and innovation in the grain industry.

The board’s jurisdiction in Western Canada includes Manitoba, Alberta, Saskatchewan and parts of British Columbia. The board conducted its own plebiscite in September, in which 62 percent of wheat farmers and 51 percent of barley growers voted to retain the monopoly.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE