Wheat Board: one legal adventure too many

[Fransisco]

From this weeks Agri-week

A decision by the Federal Court of Appeal could upend the monopoly

The Federal Court of Appeal seems to have a relaxed attitude to issuing its decisions other than to parties in disputes brought to it, so as of June 30 it had not yet formally released its decision, rendered on June 23, regarding an appeal by the Harper government of a lower court ruling in favor of the Canadian Wheat Board in the so-called gag order case. It was the Wheat Board itself that first posted the full judgment on its web site, on June 29. The irony is that the judgment has the potential
to restore a degree of government authority over the Board and its actions that it has spent the last 10 years resisting.

The original lawsuit was filed by the Board in late 2006 after then agriminister Strahl ordered it to stop spending money advocating the retention of its western wheat and barley marketing monopoly. It successfully argued before Federal Court of Canada judge Roger Hughes that the elected board of directors exclusively controls the Board and determines how it spends its funds. The suit also cited the Charter or Rights & Freedoms and contended that the Board’s right to free expression had been violated, a position that Hughes also accepted as he agreed with the Board on all points. (It never literally meant, as the Board enthus iastically interpreted it and constantly repeated, that control by the directors necessarily equals “control by farmers” since a third of directors are appointed).

In the appeal, the issue boiled down to which of two blatantly conflicting parts of the Canadian Wheat Board Act, sloppily rewritten by then agriminister Goodale in 1998, actually applies. Sec. 18(1) states in part that the government (Governor in
Council) can “direct the Corporation with respect to the manner in which any of its operations, powers and duties . . . shall be conducted, exercised or performed.” But 4(2) states that the Board is not a crown corporation nor an agent of the crown,
and that the responsible minister must consult with the board of directors (and presumably have their consent) before any substantial changes can be undertaken.

The Hughes decision gave almost all weight to the latter, and also declared that the Board is entitled to Charter of Rights protection, since it is not part of the government. Commenting on the ruling in June 2008, the Wheat Board said that the court affirmed and vindicated its position: although the government (that is, taxpayers) is responsible for the Board financially, it has no legal right or authority over the directors. (In fact, both elected and appointed directors serve at the pleasure
of the minister, who can fire them at will).

The Court of Appeal completely reversed these positions and has restored the authority of the government over what is clearly a creature of the government. This landmark decision declares that government authority over the Board “extends to the full range of activity which the Act authorizes the Wheat Board to conduct.” It completely demolishes the reasoning used by Hughes to support the Wheat Board. Whereas the Board complained that the real purpose of Strahl’s ‘advocacy directive’ was to silence opposition to political policies of the Conservative government, the three-judge appeal court opinion affirms that doing so is within the government’s legal power, at least insofar as it involves the use of pool account money that belongs to farmers.
In the long history of the Wheat Board’s legal assaults on the government (and also the railways) there has not been such a stunning setback for the Board. The first time the Board succeeded in thwarting government policy in the courts was in 1993, when the first attempt to remove its monopoly over barley was made by Charlie Mayer, the Mulroney government’s minister responsible for the Board. Since then there have been half a dozen other legal actions by the Board against the government (although none against a Liberal government), aimed at protecting its alleged independence. The Board has spent millions in legal fees and costs (including court costs in the latest case) for purposes that, whichever way
decided, had no benefit for wheat and barley growers.

Last week the Board hinted it could attempt an appeal to the Supreme Court of Canada. Barring such an appeal and an outcome favorable to the Board, the Court of Appeal decision appears to change the landscape. It also makes puzzling the ruling of July 2007, by the same court, to the effect that the government cannot end the barley monopoly without legislation.

If the same reasoning had been used as in the gag order case, it would have led to a very different decision, allowing the government more scope to unilaterally change aspects of the marketing system.

The Appeal Court also dismissed the Wheat Board’s claim that a government order appointing Greg Arason as interim
CEO in December 2006 and setting his compensation was unlawful. Arason was appointed after Strahl dismissed Adrian
Measner, who refused to agree to refrain from promoting the monopoly in public forums.

This decision means not only that the Board cannot incur costs to promote the monopoly in the future, but that many other things the directors have done might have been overruled by the federal cabinet, and can be overruled in the future.

At the very least, as far as this ruling affects the monopoly and dual market dispute, it appears to establish that the government’s
clarified authority makes possible, for example, a cabinet order to the Board to issue export permits for barley to all applicants. The Board would be legally required to do so, although it would probably first file another lawsuit. The end result would be a kind of semi-dual market in which the marketing monopoly would apply only to domestic maltsters.

It could be done in time for the 2009-10 crop year, which starts Aug. 1. If it is not done it will be because of the inexcusable and unacceptable timidity of agriminister Ritz and prime minister Harper.

[Fransisco]

And there is this as well...

The Edmonton Journal published the following quotation last week attributed to Canadian Wheat Board chairman Hill, commenting on the Federal Court of Appeals decision that demolished important claims used by supporters of the monopoly: “The appeal court decision runs contrary to the views of western farmers, I think. In my opinion, Western Canadian farmers believe that they’re electing directors to operate the CWB, not to have the government make decisions
about how the organization is operated.” He added that the court decision “muddies” the water in terms of who is really in charge of the Board. Of course the court decision, refreshingly and belatedly, greatly clarifies the water.

In no case or sense are Canadian court decisions required or intended to be popular with or to please any pressure
group, such as the pro-monopoly directors or single -desk fans.

The same reporter also quoted Stewart Wells, the National Farmers Union official much interviewed not because he has anything to say but because newspaper reporters who belong to unions like the ‘Union’ in the name of the outfit which pays him. Wells thought it was “an absolute insult” that the second-highest court in the land should side with the Harper government, and that one of the results could be making it harder to “set the record straight.”

Strange. Supporters of the Wheat Board monopoly had no trouble with government control for 50 years before
1998, when it was run by three to five commissioners appointed by the government. So-called ‘farmer control’ was an invention of the Liberal government to get out of being in the middle of the even-then intense debate over the compulsory, dictatorial aspects of the single -desk system.

The cabinet accepted the idea of Ralph Goodale that the Board could be placed at arm’s length from the government and so avoid having to take the side either of proponents or opponents
of the monopoly system. Complicated, contradictory entanglements were written into the Canadian Wheat Board Act law to make removing the monopoly system as difficult as possible. But to keep some semblance of balance, various clauses were inserted
by government lawyers and senior bureaucrats who understood that the securing of Board liabilities with unlimited government guarantees and the potential exposure for taxpayers could not be tolerated without a mechanism for government supervision.

That is why the Act requires a minister of the crown to be designated as ‘responsible’ for the Wheat Board, why annual reports of the Board must be tabled before parliament, why initial payments (which are guaranteed by the treasury) must be specifically approved before they can be paid and why the Governor in Council (the legal name of the federal cabinet) has specific authority under the Act.

Goodale went as far as he could, but it was not the intent of the government or the law to create the preposterous situation in which the government is responsible for all the bills but has no say in how they are incurred.

The directors have never had the unlimited authority to run the Board that Hill and others think they have, and because of the wonky and faulty director election system control by the directors does not equal control by farmers. <b.The directors simply appropriated absolute dictatorial power and then repeated their claim to it so often that it came to be accepted.</b> Somehow a decade has passed without properly resolving the relationship between the government’s and directors’ authority.

Of course the latest court case may not ultimately resolve it because the Board can appeal a last time to the Supreme Court of Canada. It would be risky because if the top court were to hear the case and uphold the Court of Appeals version, the imaginary notion of absolute ‘farmer’ control would finally evaporate. Otherwise the directors are on notice that they cannot do whatever they want and that the government of Canada has a legitimate right of supervision and
intervention. Morally the right of intervention derives not just from financial guarantees but also from the fact that the Wheat Board, alone among all government agencies and institutions, has the ability to abuse the civil and property rights of people subject to the commercial monopoly.

People of the Hill-Wells turn of mind will have to start to understand that the Board cannot do anything it wants
unless it (a) does not have the monopoly and (b) takes financial responsibility for itself. <b>Directors unwilling to abide by the law as it has been clarified should resign, or be fired</b>. As it is, if the Wheat Board were a country (which some of its supporters seem to think it is), it would be Iran and the appeal court decision would be a United Nations sanction.

[Fransisco]

oops, lets try that again.

And there is this as well...

The Edmonton Journal published the following quotation last week attributed to Canadian Wheat Board chairman Hill, commenting on the Federal Court of Appeals decision that demolished important claims used by supporters of the monopoly: “The appeal court decision runs contrary to the views of western farmers, I think. In my opinion, Western Canadian farmers believe that they’re electing directors to operate the CWB, not to have the government make decisions
about how the organization is operated.” He added that the court decision “muddies” the water in terms of who is really in charge of the Board. Of course the court decision, refreshingly and belatedly, greatly clarifies the water.

In no case or sense are Canadian court decisions required or intended to be popular with or to please any pressure group,such as the pro-monopoly directors or single-desk fans.

The same reporter also quoted Stewart Wells, the National Farmers Union official much interviewed not because he has anything to say but because newspaper reporters who belong to unions like the ‘Union’ in the name of the outfit which pays him. Wells thought it was “an absolute insult” that the second-highest court in the land should side with the Harper government, and that one of the results could be making it harder to “set the record straight.”

Strange. Supporters of the Wheat Board monopoly had no trouble with government control for 50 years before
1998, when it was run by three to five commissioners appointed by the government. So-called ‘farmer control’ was an invention of the Liberal government to get out of being in the middle of the even-then intense debate over the compulsory, dictatorial aspects of the single -desk system.

The cabinet accepted the idea of Ralph Goodale that the Board could be placed at arm’s length from the government and so avoid having to take the side either of proponents or opponents
of the monopoly system. Complicated, contradictory entanglements were written into the Canadian Wheat Board Act law to make removing the monopoly system as difficult as possible. But to keep some semblance of balance, various clauses were inserted by government lawyers and senior bureaucrats who understood that the securing of Board liabilities with unlimited government guarantees and the potential exposure for taxpayers could not be tolerated without a mechanism for government supervision.

That is why the Act requires a minister of the crown to be designated as ‘responsible’ for the Wheat Board, why annual reports of the Board must be tabled before parliament, why initial payments (which are guaranteed by the treasury) must be specifically approved before they can be paid and why the Governor in Council (the legal name of the federal cabinet) has specific authority under the Act.

Goodale went as far as he could, but it was not the intent of the government or the law to create the preposterous situation in which the government is responsible for all the bills but has no say in how they are incurred.

The directors have never had the unlimited authority to run the Board that Hill and others think they have, and because of the wonky and faulty director election system control by the directors does not equal control by farmers. <b>The directors simply appropriated absolute dictatorial power and then repeated their claim to it so often that it came to be accepted.</b> Somehow a decade has passed without properly resolving the relationship between the government’s and directors’ authority.

Of course the latest court case may not ultimately resolve it because the Board can appeal a last time to the Supreme Court of Canada. It would be risky because if the top court were to hear the case and uphold the Court of Appeals version, the imaginary notion of absolute ‘farmer’ control would finally evaporate. Otherwise the directors are on notice that they cannot do whatever they want and that the government of Canada has a legitimate right of supervision and
intervention.

Morally the right of intervention derives not just from financial guarantees but also from the fact that the Wheat Board, alone among all government agencies and institutions, has the ability to abuse the civil and property rights of people subject to the commercial monopoly.

People of the Hill-Wells turn of mind will have to start to understand that the Board cannot do anything it wants
unless it

(a) does not have the monopoly and

(b) takes financial responsibility for itself.

<b>Directors unwilling to abide by the law as it has been clarified should resign, or be fired</b>.

As it is, if the Wheat Board were a country (which some of its supporters seem to think it is), it would be Iran and the appeal court decision would be a United Nations sanction.

[Raven]

Agri-week states:

"But [section] 4(2) states that the Board is not a crown corporation nor an agent of the crown,
and that the responsible minister must consult with the board of directors (and presumably have their consent) before any substantial changes can be undertaken."

I looked 4(2) up and it says:

"4.(2) The Corporation is not an agent of Her Majesty and is not a Crown corporation within the meaning of the Financial Administration Act."

No mention of restrictions on the Minister and it is not an agent or Crown Corporation WITHIN THE MEANING OF THE FINANCIAL ADMINISTRATION ACT.

Also, Section 6.(d) (j) authorizes the CWB "to act as agent for or on behalf of any minister or agent of Her Majesty in right of Canada in respect of any operations that it may be directed to carry out by the Governor in Council;"

[Raven]

Justice Rothstein who is now on the Supreme Court gave a good analysis of the CWB Act in R. v. Jackson (1997) 41 FTR 1(FCTD. He stated:

8 "the Canadian Wheat Board can be characterized as a Corporation with significant public aspects which involve the carrying out of government policy."
He then specifically identified the licencing powers as public:
10 "Under these [Part IV] provisions, the Canadian Wheat Board is granted a significant regulatory power. The Board is to engage in the granting of export licences for the purposes of carrying out government policy..."

11 "A regulatory power such as the granting of licences is by nature public. There can be no doubt that when the Board is carrying out the licencing power, it is not exercising the general management powers of an ordinary Corporation. No ordinary Corporation has the power to regulate."

[Raven]

The government intended to maintain the public aspects referred to by Justice Rothstein as stated by Howard Migie, Director General, Adaption and Grain Policy Directorate who wrote to Parliament's Standing Committee on Agriculture that the government needed to retain involvement regarding management and direction of the CWB:

"One is the control that the Canadian Wheat Board has over export licences across Canada...
The authority to control exports is clearly an important power that the CWB has and its not a power that the government normally delegates to private enterprises or to enterprises whose Board of Directors are controlled by the private sector."

[Fransisco]

The bottom line is the Conservatives have more than enough power and authority to grant us the ability to sell our grain to whomever we like.

Maybe we need to start pointing this out to them. And then reminding them of it again and again and again.

[Raven]

I agree Fransisco, and it needs to be for both wheat and barley - not just barley.

My feeling is that we should start with feed and fuel grains and un-registered varieties, and for producers only.

If I remember properly, this was the unanimous recommendation of Goodale's WESTERN GRAIN PANEL which he ignored.

Feed grain was freed up inside Canada by regulation only, for about 25 years. Producer grain is a part of Agriculture and outside of the Trade and Commerce control of the CWB. The CWB does not buy and sell unregistered varieties or grain for ethanol.

Without disrupting the CWB buying and selling and legislated control over the handling and transportation system, this would give significant relief to producers.

[liberty]

The silence of the CWB monopoly supporters on this critical issue is absolutely deafening.

Unfortunately, so is the silence of the Conservative government.

[Fransisco]

From this weeks producer...

A Federal Court of Appeal decision has overturned a lower court ruling and says <b>the federal government has broad powers to direct the activities of the Canadian Wheat Board</b>.

In a June 23 decision, the court sided with the federal government's appeal against a 2008 lower court ruling. That earlier ruling lifted a 2006 federal government order that prevented the wheat board from publicly speaking in favour of the single desk.

Now, that gag order on the wheat board is back in effect.

CWB officials say their biggest concern is not the gag order, but the court's affirmation of the government's authority to control the agency's activities.

"Certainly the intention of the 1998 (CWB) Act was that control should be passed to the board of directors, and this runs contrary to that," said CWB chair Larry Hill.

"This decision goes against what western Canadian farmers want to see."

A 2008 survey of farmer opinion by the CWB found that 77 percent wanted the board of directors to control the CWB, while only 17 percent wanted the government in control.

Hill said the board of directors will consider its next step at its July board meeting. That could include an appeal to the Supreme Court.

Federal agriculture and CWB minister Gerry Ritz failed to return a phone call seeking his comment.

<b>In its 23-page decision, the court relied largely on a strict interpretation of section 18 (1) of the CWB Act, which states:

"The governor in council may, by order, direct the corporation with respect to the manner in which any of the operations, powers and duties under this act shall be conducted, exercised or performed."</b>

The court rejected arguments put forward by the CWB that amendments to the act in 1998 establishing a producer-elected board of directors were intended to limit the government's authority to direct the board's activities.

It said <b>the intent of Section 18 (1) is that in the event of a disagreement, the government should retain the ultimate power to decide.

In a unanimous decision, the three-judge panel said the act makes it clear that the government has the authority to direct the CWB on "any matter of governance." </b>

The ruling also negated the lower court's ruling that the gag order violated the board's right to freedom of expression under the Charter of Rights and Freedoms.

National Farmers Union president Stewart Wells said the board should seek leave to appeal the ruling to the Supreme Court.

He said the court's decision violates the spirit of the 1998 amendments to the act, which was to provide farmers with more control over the CWB.

"The entire organizational structure of the board was changed and the government of the day made it clear control was being handed over to farmers," he said.

Wells added all the recent disputes between the Conservative government and the board and its supporters boil down to the issue of who controls the marketing agency.

Kevin Bender, president of the Western Canadian Wheat Growers Association, said the organization was happy with the court ruling.

"We're pleased that the wheat board won't be allowed to use farmers' money to promote its monopoly," he said.

If the board was a voluntary marketing agency, it would be free to spend money however it wants, he said, but it shouldn't be allowed to spend money from farmers who don't support the monopoly.

Bender said control of the CWB wouldn't be an issue if the agency was voluntary.

[Fransisco]

Looks like Hill and Wells are trying to put Humpty Dumpty back together again. They BS'ed everyone into the farmer controled myth before I guess they figure they can do it again.

[Fransisco]

Here's another question I have with all this.

If the government has the power to "direct the corporation with respect to the manner in which any of the operations, powers and duties under this act shall be conducted, exercised or performed."

Can it not then order an end to all of these nuisance lawsuits the Board keeps bringing against the government?