The outcome of a class action lawsuit pitting prairie farmers against Ottawa and the former Canadian Wheat Board will have no impact on the proposed sale of the CWB to Global Grain Group (G3).
In an April 22 interview with The Western Producer, CWB president Ian White said potential liabilities stemming from a class action suit will have no bearing on the deal to sell a 50.1 percent stake in CWB to G3 Global Grain Group.
White said government has agreed to cover any settlements stemming from the class action, assuming that those liabilities were the result of government actions.
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Aggrieved prairie farmers are expected this summer to seek certification for a class action suit against the Canadian Wheat Board and the federal government.
Lawyers involved in the suit say litigants will seek monetary damages for what they consider the unlawful expropriation of farmer’s assets that were controlled by the CWB.
One asset expected to be involved in the claim is a block of money that was transferred into a contingency fund at the former wheat board.
Litigants say that money should have been kept in the CWB’s pool accounts during the 2012-13 crop year and paid to farmers.
It is not yet known if other CWB assets will be involved in the suit.
CWB’s tangible assets as of Aug. 1, 2012 included a fleet of hopper cars, a $22 million investment in two new ships, land holdings, and a Winnipeg office building that has since been sold for $9.7 million.
Federal agriculture minister Gerry Ritz has consistently argued that tangible assets controlled by the CWB at the beginning of the 2012-13 crop year were heavily leveraged and had no significant book value.
Critics say Ottawa’s contribution to the CWB wind-up is difficult if not impossible to assess, primarily because the CWB’s financial information has not been public since July 31, 2012.
If Ottawa did contribute $300 million, it is likely that the money was used primarily to deal with so-called legacy or transition costs, including severance payments and pension liabilities, they say.
Ritz alluded to the value of CWB’s assets again on April 23 during a presentation in Saskatoon.
“I’m reading all kinds of articles right now that the worth of the wheat board is a multi-million-dollar company,” he said.
“The only assets they (had) was my grain and your grain.”
Larry Hill, a Saskatchewan farmer who acted as wheat board chair until 2010, said the CWB’s tangible assets had significant book value when he was on the board.
“The CWB’s assets, the building and the rail cars and all that sort of thing were certainly wholly owned,” Hill said.
“There was no debt on that.”
“I wouldn’t be surprised if the CWB owed a bunch of money in severance,” he added.
“They (Ottawa) took a going concern and shut it down basically, so there are always costs associated with that.”
brian.cross@producer.com
