2016 deadline CWB plans to unveil full details in 2014, while parties continue legal fight over organization’s assets
Canada’s agriculture minister is looking forward to learning more about CWB’s plan to privatize the former Canadian Wheat Board, including its plan to offer equity to farmers who sell grain through the CWB.
Gerry Ritz said last week he has seen no details of the CWB’s privatization plan, other than what was posted recently on its website about farmer equity.
CWB is offering $5 of equity for each tonne of grain that farmers market through the CWB in 2013-14.
The equity plan is one component of the CWB’s privatization plan. Other details will be announced in the coming weeks.
“I haven’t seen it,” Ritz said of the privatization plan Sept 23.
“I’ve (only) seen the website … and the speculation as to them moving forward.”
CWB has until August 2016 to submit a plan for privatizing the former wheat board.
The plan must be approved by the federal agriculture minister and executed by Aug. 1, 2017.
Ritz said CWB officials have indicated that they will present their plan in 2014, well before the 2016 deadline.
“The timeframe in the five–year transition period … said that in 2014, at some point in 2014, they would come to me with a plan,” Ritz said.
“They’re ahead of schedule and they tell me they’re excited to be ahead of schedule.”
Ritz said he is not concerned that CWB equity is being offered only to farmers who sell grain through the CWB in 2013-14 or later.
Securities regulators have informed CWB that equity in the privatized company can’t be offered retroactively on grain sales made before 2013-14.
Anders Bruun, a Winnipeg lawyer who is leading a $17 billion class action against Ottawa, said the promise of CWB equity is short on detail, especially given that the organization is involved in unsettled legal claims.
“I’ve seen a couple of pages on their website, but it doesn’t look like an equity offering to me and I don’t think there’s been a prospectus that’s been put together … so I don’t know precisely what form of equity they’re issuing,” Bruun said.
“To the extent that there is any value or assets that are being given away here, then the question that arises is who might have a better claim to those assets or that equity,” he continued.
“I would say, off the top of my head, that the farmers who put the money into the wheat board and built it up … (before) the end of the 2012 crop year would have a very good claim to that equity, whatever it might be.”
The value of CWB’s assets and the dispute over who owns them is the subject of an ongoing legal controversy.
In its 2011-12 annual report — the wheat board’s last as a single desk entity — CWB said three class action lawsuits had been filed against Ottawa seeking damages allegedly caused by Bill C-18, the bill that ended the board’s single desk marketing authority.
Two of those suits — the Filson class action launched in Saskatoon and the Katerenchuk class action launched in Alberta — were seeking damages of $15.4 billion.
The Dennis class action, led by Bruun, is seeking $17 billion in damages.
“It is not possible to predict the outcome of this lawsuit and the amount of damages, if any, that may be assessed against the Corporation,” the CWB’s annual report states.
Among other things, the class actions are seeking farmer compensation for assets contained in a CWB contingency fund that was valued at $145 million as of July 31, 2012.
That fund, which included contributions of more than $42 million in the 2011-12 crop year, can be used to finance any activities set out in CWB’s annual corporate plan or for any other purposes approved by Ottawa.
Ritz suggested that discussions over the value of CWB’s assets are meaningless. The value of CWB’s assets was more than offset by its financial liabilities, he said.
“That’s one of the reasons that, as a federal government, we put forward some $350 million to make sure their pension plan was actuarily sound and to make sure that the costs they had would be covered,” he said.
“There’s all this talk about these assets, the rail cars, the buildings and so on, but I can tell you that there were loans against those (assets) that would have taken … them (down) as a private sector.
“There were no assets to turn back to farmers.”