Final legal judgment rendered in wheat board saga

A judge has thrown out a class-action lawsuit that sought damages for certain grain farmers in relation to the end of the Canadian Wheat Board monopoly by the federal government.

It’s the last of extensive litigation over the dissolution of the board.

Manitoba Court of King’s Bench Justice Chris Martin, in a decision this month, dismissed farmer Edward Andrew Dennis’s 2017 civil claim against the federal attorney general and G3 Global Grain Group, the successor to the wheat board.

The wheat board was created in 1935 as a voluntary marketing program and transformed into a compulsory marketing agency in which farmers were required to sell their wheat and barley to it.

It used small-scale grain elevators and a subsidized railway network to get grain to ports.

Following the 2011 federal election, the Conservative government of Stephen Harper began to take steps to turn the board into a private entity.

“This change spurred a host of litigation, of which this claim, 15 years later, is the last,” wrote Martin in his decision.

He denied Dennis’s motion for summary judgment and dismissed his claim.

Dennis filed the class action on behalf of grain farmers who sold through the wheat board’s pool marketing program from 2010 and 2012, the last two years of its monopoly.

The lawsuit accused the federal minister responsible for the board of misfeasance in public office and the wheat board of breach of contract. It sought more than $91 million in total damages.

“It’s finally closed the book on a very long chapter in agricultural policy here in Western Canada,” said Barry Prentice, a professor of supply chain management, about the court ruling.

The court action focused on two options available for farmers — through a pool program, in which grain delivered in a given geographic area was pooled by its type, and a non-pool program.

Those who sold product through the pool got an initial payment based on the expected sale as well as payments for any increase in value when the goods were sold, plus financial surplus from the pool, the judge wrote.

Those who did not sell through the pool would get more money upfront, but no payments down the line.

The board was responsible for covering losses incurred by the the non-pool sellers and it set up a separate contingency fund to hold gains from those sales. That fund had a limit on how much it could hold and profits from the non-pool program were defaulted to the pool account, if the limit was reached.

If the amount contributed to a surplus in the pool account, it was to be paid to producers who were in the pool, the court decision said.

The claim argued the minister committed misfeasance by recommending to cabinet in late 2011 that the wheat board increase its contingency fund cap from $60 million to $100 million, and then to $200 million, and that he directed the board to credit money to the fund.

The lawsuit argued the fund was essentially used as a retained earnings account to pay for the privatization of the board.

The claim argued the board breached contractual obligations to the class-action farmers by crediting the contingency fund as it did in the fall of 2011 and by paying from pool accounts some costs notionally related to its transition to a private entity.

Martin dismissed those arguments. He found the minister’s actions were proper, that there was not an actual contract with the farmers and that the wheat board was forced to pay those transition costs from the pool money.

erik.pindera@winnipegfreepress.com