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WINNIPEG, Manitoba (Reuters) - Suspending a new law that ended the Canadian Wheat Board's monopoly would sow confusion in Western Canada's grain industry, lawyers for the federal government said in court on Wednesday in a hearing on a plea from eight former directors.
The onetime CWB directors, Prairie farmers ousted when the bill to revamp the CWB became law last month, want a Manitoba judge to suspend the law until the court decides its validity.
Judge Shane Perlmutter reserved his decision until an unspecified date.
Government lawyer Robert MacKinnon said such a ruling would create uneven marketing conditions between Manitoba - where it would immediately take effect - and other Prairie provinces, and would undermine contracts that some farmers and grain companies have already signed.
Canada is the world's biggest exporter of spring wheat, durum and malting barley, and legal challenges have already created confusion as farmers price out their crop options for spring planting.
"The uncertainty that has been created was created by the (legal) action itself," MacKinnon told the judge. "An injunction doesn't dispel the uncertainty."
The former directors' case leans heavily on a Federal Court ruling in December that said Agriculture Minister Gerry Ritz breached existing law by not consulting the Wheat Board or holding a farmer vote before introducing the legislation.
They say that ruling raises questions about whether the new law is valid, so it must be suspended until a court can rule on its validity.
The government lawyers said the ex-directors are exaggerating the significance of the Federal Court's ruling, which specified that it did not affect the legislation.
"You cannot make a brick out of a single grain of sand," MacKinnon said.
Farmers in Western Canada have been required since 1943 to sell wheat and barley for milling or export via the Wheat Board. The new law, which takes effect in August, lets farmers sell to whomever they choose. But grain handlers, millers and farmers are already signing contracts to deliver crops after the monopoly is gone.
In mid-December, the same Manitoba judge rejected the farmers' request for an immediate suspension of the law but set this hearing to hear lawyers' arguments.
The former directors say their case is pressing because farmers and grain companies are making deals under a law that may not be valid.
"The legislation will bring irreparable change to the Canadian Wheat Board and the change will harm not only (the ex-directors), but producers across Canada," said the former directors' lawyer, Colin MacArthur. "All producers have been disenfranchised improperly because of the refusal of the minister to do what he was statutorily required to do."
The case is before the Court of Queen's Bench of Manitoba, Winnipeg Centre, Court File No CI 11-01-75257. It is between Allen Oberg, Rod Flaman, Cam Goff, Kyle Korneychuk, John Sandborn, Bill Toews, Stewart Wells and Bill Woods; and Attorney General of Canada.
Reporting by Rod Nickel; Editing by Janet Guttsman