Lawrence Yakielashek is proceeding with caution toward an open market for wheat and barley.
The president of Toepfer Canada remembers what happened the first time the federal government tried to remove barley from the single desk.
The continental barley market created Aug. 1, 1993, lasted 41 days before a federal court judge overturned the Progressive Conservative government’s cabinet order, saying such a change in the Canadian Wheat Board’s monopoly powers could only be made through parliamentary legislation.
Memories like that make grain companies such as Toepfer wary about getting ahead of themselves.
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Toepfer recently bought pulse processor Western Grain Cleaning and Processing Ltd. in North Battleford, Sask. Yakielashek said the company will add new crops to the mix but he’s not ready to announce that board grains will be among them.
“Legislation can be overturned as quickly as it tries to get introduced,” said Yakielashek. “You never know, so you’ve got to be careful.”
He said the grain industry will closely monitor what transpires Dec. 6, which is the date by which the federal court has agreed to hear applications for a judicial review of the government’s decision to get rid of the single desk filed by the Canadian Wheat Board and Friends of the CWB.
Proponents of an open market feel more at ease about the latest attempt to create an open market than they were the previous two times, when the courts overturned the government’s decision.
The federal government’s second attempt was thwarted in 2007 when a federal court judge ruled the Conservative government could make such a change only through Parliament and not by a regulatory order.
Brian Otto, president of the Western Barley Growers Association, said 800,000 tonnes of barley had been privately contracted between producers and grain companies and exporters. All of those transactions had to be executed by the CWB.
Otto said both rulings were bitter disappointments for anti-monopoly forces, but he is confident that won’t be the case this time.
“It would be very unlikely that a judge could overturn an act that has passed through Parliament. I don’t think it has ever happened in Canadian history,” he said.
Wade Sobkowich, executive director of the Western Grain Elevator Association, said the latest attempt at an open market is different than the previous attempts.
This time the change is coming in legislation rather than through a cabinet order or a change in regulations.
“Our concern that this may not come to pass is probably one-tenth of the concern that we would have had on barley,” said Sobkowich.
“If a judge did rule that the current government doesn’t have the right to change legislation, then we’d be in a constitutional crisis.”
Sobkowich said it is possible a judge could rule against the government in the initial trial, but the legal advice that the WGEA has received indicates such a ruling wouldn’t last.
“Upon appeal, eventually a superior court would provide a ruling that is consistent with the point of view that Parliament reigns supreme.”
The wheat board has received similar advice, said former CWB director Jeff Nielsen. In his Oct. 31 resignation letter from the board, Nielsen said the CWB received advice from internal and external counsel that a legal challenge would be fruitless.
That leads Otto to believe there is an ulterior motive for the court case.
“My interpretation of what’s going on here is the wheat board is trying to slow the whole process down by launching a legal action,” he said.
“(That is) creating uncertainty in the industry and that’s the last thing the industry needs right now.”
Wheat board chair Allen Oberg was unavailable for comment.
Sobkowich said the level of uncertainty in the grain industry varies by company. Two firms have already announced value-added durum and barley investments while others such as Toepfer are proceeding cautiously.
He believes most companies will proceed with contracting board grains and making sales once Bill C-18 receives royal ascent, despite the lingering legal uncertainty.
“You have to get on with business and take some calculated risks,” said Sobkowich.
