A class action lawsuit against the federal government and Canadian Wheat Board would provide no net financial gains to prairie farmers if it succeeded, says an official with the CWB.
A group of farmers has taken the federal government and CWB to court, claiming the board has been improperly taking money out of the pool accounts to pay expenses associated with export licences for farmers outside the board’s designated area.
Last week a Federal Court judge rejected a motion to have the two-year-old case thrown out before going to trial.
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That decision may be appealed by the federal government, and even if the case proceeds, it’s expected to be months or years before it gets to trial.
While the board declined to comment on the legal issues raised in the case, spokesperson Louise Waldman did say the amount of money at stake is insignificant.
The cost of administering those export licences is usually about $3,000 a year, she said, and has been reduced to about $1,500 a year following the board’s recent corporate review.
“Any process to recover that would actually end up costing more to administer than would be taken in,” Waldman said in an interview.
However, the lawyer acting on behalf of the farmers disputes those numbers, saying the annual costs are more like $2-$3 million once everything like salaries, overhead, computers and so on are take into account.
He added the suit also is seeking compensation to cover all the years the program has been in effect, including interest.
“Significant amounts of money are involved,” he said.
The lawsuit says taking revenue from the pool accounts to pay for the export licences outside the designated area violates the CWB Act. Supporters of the suit say those costs should be paid by the federal government, not western farmers.
However, Waldman said the board believes farmers in Western Canada do receive a general benefit by having the board administer export licences from outside the designated area.
“We are in the long term protecting the pool returns because by issuing export licences in Ontario, we ensure that no wheat board grains are improperly exported as Ontario wheat,” she said. “That has the potential to cost the pool returns much more than $1,500 a year.”
It’s also cost effective to have a single infrastructure for administering export licences for all Canadian wheat and barley, she said, and it makes sense for the board to be the agency that does it.
“It’s our business to market grain so we are well-positioned to do this,” she said.
