Canadian Wheat Board sues Tories over plan to dismantle monopoly

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The battle over the future of the Canadian Wheat Board is shifting to the Federal Court, where a judge is being asked to rule on whether the Harper government can unilaterally end the institution's monopoly over Western grain sales.

A slim majority of directors at the board, fighting to preserve its place in the grain industry, announced Wednesday they are suing the federal government.

Their target is the bill the Conservatives tabled in the Commons to dismantle the Prairie seller's control over wheat and barley grown from B.C.'s Peace District to the Manitoba-Ontario border.

In all, there are 15 directors at the wheat board: 10 elected by farmers and five appointed by Ottawa.

There's been tension between the two classes of directors since the Harper government took power in 2006 and replaced the appointed ones with people sympathetic to the Conservatives' policy on the wheat board.

Wednesday's lawsuit was backed by eight farmer-elected directors while another two broke with their colleagues, calling those behind the legal action ideological bullies.

Farmers themselves are divided. Those challenging Ottawa appear to represent six out of 10 wheat farmers and five in 10 barley producers, based on a plebiscite gauging support for the wheat board that the seller itself conducted last summer.

The court challenge argues the Tory government is breaking the law because changes to the board's mandate require a vote among Western grain farmers. Legal fees for the suit will be paid from the wheat board's budget.

"The Harper government has acted illegally and unethically in its attack on the Canadian Wheat Board and it must be stopped," board chair Allen Oberg told a gathering of farmers in Headingley, Man., just outside Winnipeg.

Agriculture Minister Gerry Ritz, whose party has campaigned against the wheat board since its Reform days, said the suit will not dissuade the Conservatives. He said the Tories, who have a Commons majority, will proceed as planned.

The minister said the Tories don't believe a farmers' vote is required in this case.

Ultimately, Mr. Ritz said, the power to change any law should rest with Parliament.

"The government maintains the Parliament of Canada alone has the supremacy alone to enact, amend or repeal any piece of legislation including the Wheat Board Act," Mr. Ritz told reporters. "This is an essential feature of Canadian democracy."

Mr. Oberg, however, said Parliament can't run roughshod over the wishes of directors elected by farmers. "A majority government does not confer absolute power."

Two of the Prairie grain seller's farmer-elected directors – Henry Vos and Jeff Nielsen – voted against pursuing the lawsuit at a board meeting this week.

"It's an absolute, total waste of money," said Mr. Vos, who farms about 8,500 acres in northern Alberta. "I'd call [the other directors]ideological bullies."

Mr. Vos, who had been a director for five years, added that the board received legal advice that the lawsuit had little chance of success.

He resigned from the board in protest Wednesday, saying in an open letter to farmers that "what is happening at the CWB today is, in a word, wrong."

Patrick Monahan, legal scholar and provost of York University, couldn't predict whether the wheat board challenge would succeed or fail.

But, he said, ultimately Parliament is considered to have the power to amend its own laws. "Generally, the courts have confirmed that Parliament can amend any statute that it has previously enacted, even statutes that require some form of consultation prior to amendment."

Mr. Oberg accused the Harper government of acting like a "dictatorship" and he said eliminating the board will hurt farmers and turn over control of the wheat and barley trade to U.S. companies.

"The Harper government is handing it to them on a silver platter," he said.

Mr. Ritz, for his part, called the lawsuit a "reckless and baseless legal challenge" that will cause unnecessary confusion within the grain business.

"This is part of the scorched earth policy that Mr. Oberg is pushing."

Mr. Nielsen accused the other directors of acting far too politically and not in the best interests of farmers. "I don't really see what [the lawsuit]will accomplish," he said from his farm near Olds, Alta. He added that he is also considering resigning.

Both Mr. Nielsen and Mr. Vos support the federal government's decision to end the board's monopoly.

Mr. Oberg acknowledged the divisions on the board but noted that a majority of directors and farmers support the lawsuit. "With the results [from the CWB plebiscite]in, farmers do support the board and I believe we have a mandate to pursue this challenge," he said. He added that the money spent on the lawsuit is a fraction compared to what farmers will lose once the board is gone.

The federal government has argued that the move to scrap the board will free farmers to sell their own grain, much like many already do with other crops like canola. The government has said it won a majority last May, including most of the seats on the Prairies, and that was the only vote needed to dismantle the wheat board, which has long been an objective of the Tories.

Separately on Wednesday, Ethics Commissioner Mary Dawson ruled that Conservative MPs with grain farm interests are free to vote on wheat board legislation. The NDP had complained that Western Canadian MPs with stakes in the wheat or barley business would be violating the Commons' conflict of interest code if they voted on the board legislation.

But Ms. Dawson said in a statement that she did not consider voting a conflict because the measure affects about 70,000 farmers and in her opinion therefore concerns a "broad class" of the public rather than special interests.

NDP wheat board critic Pat Martin denounced the Ethics Commissioner's ruling as disgraceful.

"Mary Dawson never seems to find anything wrong with anything that anybody ever does. … I don't know how this could be any more clear," Mr. Martin said. "[The Conservatives]argue that Prairie grain farmers will make more money if they pass this bill. That means MPs who farm grain shouldn't be voting on it. Seems pretty simple to me."