WINNIPEG FREE PRESS
March 10,2008
Canadian Wheat Board complaint is groundless
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Freelance Writer Wade Sobkowich
The Canadian Wheat Board (CWB) has publicly criticized Minister Gerry Ritz and the federal government for including a dispute resolution process within Bill C-46, An Act to Amend the Canadian Wheat Board Act.
More specifically, the CWB alleges that enacting arbitration as a means of resolving disputes between grain companies or producers and the CWB "could cost tens of millions of dollars a year" and that "this legislation would essentially take money from farmers and hand it over to the grain companies." Such statements are groundless and fail to take into account the commercial reality that all businesses operate within.
For the last several years, the Western Grain Elevator Association (WGEA) has requested arbitration as a means of resolving disputes that occur from time to time with the CWB.
Commercial disputes between parties are a fact of life and, in most commercial agreements, the parties voluntarily agree that when such disputes arise they are best resolved by way of arbitration because of the prohibitive cost of litigation and the long delays associated with litigation through the court system.
Arbitration is common in the agriculture industry.
The Canadian Transportation Agency arbitrates disputes between grain shippers and railways.
The Canadian Grain Commission arbitrates disputes between grain companies and producers. Commodity exchanges arbitrate disputes between commodity dealers.
Canadian grain merchants and their international customers submit disputes to arbitration through their memberships in various trade associations.
By contrast, the CWB has steadfastly refused, with a few exceptions, to agree to arbitrate commercial disputes to which it is a party.
Its motivation is simple: because it holds a monopoly over the purchase and sale of Canadian wheat and barley, it does not need to be commercially reasonable.
It believes that submitting itself to a standard of reasonableness, a standard to which all other industry stakeholders are held, would cause it to lose "tens of millions of dollars a years." The CWB's claims are either grossly exaggerated or, worse yet, exemplify the extent to which it abuses its monopoly powers by acting in a commercially unreasonable fashion with producers and grain companies.
To be clear, the CWB would only "lose" anything if an independent third party, hearing both sides of a dispute, concluded that the CWB's position was unreasonable.
This cannot, with any degree of seriousness, be described as being a genuine loss to the CWB or to anyone else.
The CWB, in its recent comments, has also stated that "grain companies can already arbitrate disputes with the CWB through either the federal Competition Bureau or the courts".
With respect, the federal Competition Bureau is not mandated to arbitrate commercial disputes between parties.
Furthermore, recourse to the courts to resolve commercial disputes is an extremely costly undertaking for all parties and does not provide quick resolution to timely issues.
Having itself experienced the expenses associated to litigation over the last several years at a cost of several millions of dollars, the CWB should be looking for ways to avoid finding itself in courtroom battles rather than encouraging them.
Arbitration of commercial disputes between the CWB and grain companies or producers makes eminent sense. In fact, the previous Liberal government was supportive of such a process but was defeated before it could be implemented.
If there is criticism to be raised about the proposed arbitration process it is that it is not truly commercial since it requires the CWB's approval to submit a matter to arbitration as a pre-condition.
Notwithstanding the recent comments of the CWB we trust that this approval will not be unreasonably withheld.
The CWB is truly isolated in its opposition to this dispute resolution process. It fails to understand that when it holds significant monopoly powers, it is charged with certain responsibilities, not the least of which is to act responsibly and fairly in the exercise of those powers.
Wade Sobkowich is the executive director of the Western Grain Elevator Association
March 10,2008
Canadian Wheat Board complaint is groundless
------------------------------------------------------------------------
Freelance Writer Wade Sobkowich
The Canadian Wheat Board (CWB) has publicly criticized Minister Gerry Ritz and the federal government for including a dispute resolution process within Bill C-46, An Act to Amend the Canadian Wheat Board Act.
More specifically, the CWB alleges that enacting arbitration as a means of resolving disputes between grain companies or producers and the CWB "could cost tens of millions of dollars a year" and that "this legislation would essentially take money from farmers and hand it over to the grain companies." Such statements are groundless and fail to take into account the commercial reality that all businesses operate within.
For the last several years, the Western Grain Elevator Association (WGEA) has requested arbitration as a means of resolving disputes that occur from time to time with the CWB.
Commercial disputes between parties are a fact of life and, in most commercial agreements, the parties voluntarily agree that when such disputes arise they are best resolved by way of arbitration because of the prohibitive cost of litigation and the long delays associated with litigation through the court system.
Arbitration is common in the agriculture industry.
The Canadian Transportation Agency arbitrates disputes between grain shippers and railways.
The Canadian Grain Commission arbitrates disputes between grain companies and producers. Commodity exchanges arbitrate disputes between commodity dealers.
Canadian grain merchants and their international customers submit disputes to arbitration through their memberships in various trade associations.
By contrast, the CWB has steadfastly refused, with a few exceptions, to agree to arbitrate commercial disputes to which it is a party.
Its motivation is simple: because it holds a monopoly over the purchase and sale of Canadian wheat and barley, it does not need to be commercially reasonable.
It believes that submitting itself to a standard of reasonableness, a standard to which all other industry stakeholders are held, would cause it to lose "tens of millions of dollars a years." The CWB's claims are either grossly exaggerated or, worse yet, exemplify the extent to which it abuses its monopoly powers by acting in a commercially unreasonable fashion with producers and grain companies.
To be clear, the CWB would only "lose" anything if an independent third party, hearing both sides of a dispute, concluded that the CWB's position was unreasonable.
This cannot, with any degree of seriousness, be described as being a genuine loss to the CWB or to anyone else.
The CWB, in its recent comments, has also stated that "grain companies can already arbitrate disputes with the CWB through either the federal Competition Bureau or the courts".
With respect, the federal Competition Bureau is not mandated to arbitrate commercial disputes between parties.
Furthermore, recourse to the courts to resolve commercial disputes is an extremely costly undertaking for all parties and does not provide quick resolution to timely issues.
Having itself experienced the expenses associated to litigation over the last several years at a cost of several millions of dollars, the CWB should be looking for ways to avoid finding itself in courtroom battles rather than encouraging them.
Arbitration of commercial disputes between the CWB and grain companies or producers makes eminent sense. In fact, the previous Liberal government was supportive of such a process but was defeated before it could be implemented.
If there is criticism to be raised about the proposed arbitration process it is that it is not truly commercial since it requires the CWB's approval to submit a matter to arbitration as a pre-condition.
Notwithstanding the recent comments of the CWB we trust that this approval will not be unreasonably withheld.
The CWB is truly isolated in its opposition to this dispute resolution process. It fails to understand that when it holds significant monopoly powers, it is charged with certain responsibilities, not the least of which is to act responsibly and fairly in the exercise of those powers.
Wade Sobkowich is the executive director of the Western Grain Elevator Association
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