A judge in Manitoba has rejected a class-action lawsuit aimed at compensating grain farmers following the federal dissolution of the Canadian Wheat Board monopoly. This ruling is noted as the final piece of litigation stemming from that contentious decision made over ten years ago.
In a ruling issued this month, Justice Chris Martin of the Court of King’s Bench dismissed a lawsuit from farmer Edward Andrew Dennis against the attorney general of Canada and G3 Global Grain Group, which succeeded the wheat board.
Established in 1935, the Canadian Wheat Board began as a voluntary marketing program before evolving into a compulsory monopoly, requiring western Canadian farmers to sell their wheat and grain to it, with a few exceptions.
This situation persisted until after the 2011 federal election, when then-Prime Minister Stephen Harper’s Conservative government initiated a shift to privatize the wheat board.
Justice Martin noted in his ruling that this action “triggered a series of lawsuits,” with Dennis’s claim now deemed “the last” of those cases.
Barry Prentice, an agricultural economist, remarked that the ruling signifies “the conclusion” of the Canadian Wheat Board narrative, and he believes it is time for the story to be finally laid to rest.
“It created significant divisions within the agricultural community among farmers, as feelings ran high,” said Prentice, who heads the University of Manitoba Transport Institute, during an interview.
“Some were staunch supporters of the wheat board, while others risked legal consequences by attempting to transport grain across the border in protest against restrictions on their freedom.”
At rallies in Regina, farmers stand divided on keeping or ending the monopoly of the Canadian Wheat Board in 1994.
In a statement, G3’s legal representatives asserted that the ruling “provides closure to a claim that had been pursued across various courts and jurisdictions.”
A spokesperson for the federal government expressed gratitude for the “time and thoroughness” the court applied in considering this case.
Counsel for the farmers opted not to provide any comments.
Claims of Misfeasance and Breach of Contract
The class-action suit was initiated on behalf of grain farmers who utilized the wheat board’s pool marketing program during the last two years of its operation as a monopoly. The case centered on the management of funds and specific accounts by the board during that period, according to the ruling.
The lawsuit accused the federal minister in charge of the wheat board of misfeasance in public office and claimed the board itself breached its contractual obligations, seeking damages totaling just over $91 million.
The allegations focused on the two selling options available to farmers for their wheat and grain: a pool program, where grain from a specific area was pooled by type, and a non-pool program.
Farmers using the pool program received an initial payment based on projected prices, followed by subsequent payments reflecting any increase in value as the products sold and any surplus from the pool. In contrast, non-pool sellers received a higher initial payment but no additional payments thereafter, as outlined in the decision.
To cover losses from non-pool sales, the wheat board maintained a separate contingency fund where it allocated profits from these sales.
However, this contingency fund had a limit on the amount it could retain, and any profits from non-pool activities defaulted to a pool account if the fund’s cap was exceeded. If this led to a surplus in the pool account, it would be distributed to producers involved in the pool, the ruling stated.
Prime Minister Stephen Harper celebrates the end of the Canadian Wheat Board monopoly and pardons farmers who were convicted of breaking the law under the old rules
The lawsuit claimed that the minister engaged in misfeasance by advising the cabinet to raise the contingency fund limit from $60 million to $100 million and then to $200 million, and subsequently instructing the wheat board to allocate funds to that account.
Farmers contended that leading up to the changes at the wheat board, the fund was effectively utilized “as a general retained earnings account to finance the privatization” of the board.
Additionally, the claim alleged that the wheat board violated its contractual duties to farmers by allocating funds to that account in the fall of 2011 and by utilizing money from pool accounts to pay for expenses it claimed were related to the board’s transition to a private grain entity.
Justice Martin dismissed these allegations, concluding that the minister’s actions were appropriate and lawful, there was no contract established with the farmers, and the board was obligated to cover the questioned expenses using pool accounts.
‘Outlived its usefulness’
Prentice from the University of Manitoba noted that while the wheat board once fulfilled a crucial role for farmers, it “essentially outlived its usefulness” and failed to evolve—an observation he suggested might also be applicable to current regulatory frameworks.
“Some might suggest that it may be time to critically evaluate the supply management program” for products such as dairy, eggs, chickens, and turkeys, he stated.
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“It’s a politically sensitive issue, and few are willing to address it directly,” he remarked, but “it has long been under scrutiny… as to whether it continues to meet the needs for which it was originally established,” Prentice said.
“Many people support it, while others argue that … ‘No, this is driving up our food costs, and it’s time for it to come to an end.’
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