Judge rules against former wheat board directors

The Canadian Wheat Board (CWB) building is shown in Winnipeg, on December 7, 2011. THE CANADIAN PRESS/Trevor Hagan

WINNIPEG - A Manitoba judge has thrown out a bid to suspend a new federal law that ends the Canadian Wheat Board's monopoly on western grain sales.

Eight former board directors had asked for an injunction to stop the law's implementation until a court rules on its validity.

But Justice Shane Perlmutter said the directors didn't prove their case.

"The weakness of the plaintiffs' case reduces the risk that there will be any harm which calls for a remedy and increases the risk that an injunction may prevent the enforcement of valid legislation," Perlmutter said in a written decision issued Friday.

"I am satisfied that the public interest in maintaining the new act in place, pending complete review, outweighs the detriment to the plaintiffs and others caused by the new act."

The directors argued the law isn't valid because the federal government didn't hold a referendum among producers before ending the monopoly. They also suggested changes to the wheat board would hurt western Canadian farmers.

Perlmutter rejected both suggestions.

He said the section about a referendum in the original wheat board act that the directors referred to applied to grains being added or taken away from the marketing agency. It didn't address "the revamping of the single desk."

The judge also said there's no evidence that farmers would suffer irreparable harm.

"Given the conflicting evidence, it is far from clear that producers' incomes will be adversely affected. There is no clear evidence that these plaintiffs are being, for example, put out of business because of the change from the single desk."

The legislation to end the marketing monopoly was passed late last year. The former directors, who were elected by farmers, lost their jobs.

Ottawa aims to have an open market for wheat and barley by the next crop year starting Aug. 1.

Friday's decision is the latest marker in a continuing battle over the wheat board.

In December, a Federal Court judge ruled Agriculture Minister Gerry Ritz violated the original Canadian Wheat Board Act, which required a plebiscite among farmers before any major changes were made. But Justice Douglas Campbell also made it clear that his ruling was just a statement on the government's actions. He said he would not interfere with the legislative process and did not order the government to reverse its decision.

The government is appealing Campbell's ruling.

Earlier this month, the Friends of the Canadian Wheat Board filed a class-action lawsuit in Federal Court asking the court to restore the board and give farmers $17 billion in damages.

The action is separate from a lawsuit filed by wheat board supporters last month, which seeks $15.4 billion in damages.

The battle over the wheat board dates back decades.

Since the 1940s, wheat and barley farmers in Western Canada had to sell their grain through the board.

The Conservatives long promised to allow farmers the option of independently selling their grain, as their counterparts do in other regions. The government also said Parliament has the right to change its own laws.

Board supporters say the new legislation leaves farmers at the mercies of railways and big, international grain companies. They argue the monopoly prevented producers from competing against each other for sales and ensured better prices.

The Canadian Wheat Board Alliance, a member of the Friends of the Canadian Wheat Board, said it was disappointed with Friday's ruling.

"We have to look to the fact that the Campbell ruling said that really this was an affront to rule of law itself, so ... we're just going to keep forging ahead," spokesman Bill Gehl said from Regina.

"Kind of not surprised with the ruling, but certainly we're going to carry on and move ahead with the other court cases that we've launched as well."

Gehl said the ruling of a provincial judge is not the last word on the issue.

The Western Canadian Wheat Growers Association called Perlmutter's decision "thorough and thoughtful."

"It's good to see every single one of the plaintiffs' arguments flatly rejected," said Rolf Penner, the association's Manitoba vice-president.

"This ruling removes the uncertainty that was overhanging the marketplace."

Ritz said Friday's ruling makes the case for the government's appeal of Campbell's ruling.

The agriculture minister also said the decision will help farmers transition to an open market.

"We had a good feeling all along that this would be the result," Ritz said in an interview from Washington.

"Certainly, western Canadian farmers still continue to look for certainty and clarity as they move to this new marketing system. This is one more plank in building that solid foundation moving forward."

— By Jennifer Graham in Regina