December 14, 2011 / 5:23 PM / in 6 years

Canada Wheat Board to ask court to block bill

WINNIPEG, Manitoba (Reuters) - The Canadian Wheat Board said on Wednesday it will ask a court to stop the federal government from ending its 68-year-old grain marketing monopoly, casting more uncertainty on the validity of a bill poised to become law this week.

A Federal Court judge ruled last week that Agriculture Minister Gerry Ritz had breached existing law by not consulting with the Wheat Board or holding a farmer vote before introducing legislation to end the CWB’s monopoly on sales of Western Canadian wheat and barley. But he did not order the new legislation to be killed, and the government has appealed his ruling.

Wheat Board Chairman Allen Oberg said the board will ask a Manitoba court to rule that the government’s bill is invalid because it breaks the law, and ask for an order stopping its implementation.

“This government has put itself above the law by proceeding with this bill,” Oberg said, adding that the board wants farmers to be granted a vote to decide the monopoly’s future.

Ritz said in a statement that ending the monopoly is a question of freedom for farmers to sell their crops to whoever they choose and the government remains focused on passing the legislation.

“We continue to stand up for all farmers and are equally disappointed that the (CWB) directors would continue to put the industry at risk with this desperate and reckless action,” Ritz said in a statement.

Under the Conservative government bill, the Wheat Board’s monopoly on marketing western wheat and barley for milling or export would end next August, the start of the 2012-13 crop marketing year. The bill would also allow grain handlers, millers and farmers to sign forward contracts immediately for 2012 crops, but legal challenges to the legislation have left all three groups hesitant to move aggressively.

The bill has already cleared the House of Commons and is scheduled for a final vote by the Conservative-controlled Senate on Thursday evening. After that it needs only the usually automatic royal assent by the governor general to become law.

Oberg said the board will go to court as soon as the bill becomes law, possibly on Friday. In the meantime, he said he has asked Governor General David Johnston not to grant assent, which would be an extremely rare move for a governor general to make.

The Wheat Board might be successful in getting a court to stop implementation of the bill, on the basis of the court’s declaration last week that the government broke the law, said David Schneiderman, professor of constitutional law at the University of Toronto.

But it is “highly unlikely” to win the longer legal war of convincing a court to rule the bill invalid, he said.

The current law explicitly requires a farmer vote if crops are being added or removed from the monopoly. But a new judge may not agree with the court’s initial interpretation that it also applies to ending the monopoly itself, Schneiderman said.

It’s also legally difficult to hold Parliament to commitments such as consulting farmers if they are not entrenched in the Constitution, he said.

“Parliament has a wide swath of supremacy outside the Constitution.”

The Friends of the Canadian Wheat Board lobby group is considering further legal action if the CWB’s effort fails, the group’s lawyer, Anders Bruun, told Reuters.

Bruun declined to give specifics of the group’s argument.

Once the bill becomes law, Ritz has said he will immediately remove the eight farmer-elected directors who want to keep the monopoly and will take control of the board on behalf of the government.

Oberg said if the board is successful in court, the directors’ removal should be reversed. If the government pulls the CWB out of the case, the eight directors will keep the case moving as individuals, Oberg said.

The Wheat Board’s original legal challenge only asked the court to rule on the agriculture minister’s conduct, which it did last week when it ruled he broke the law. The board did not ask the court to stop the bill’s implementation at that time because it was not yet law and courts generally do not interfere with Parliament, said Jim McLandress, the CWB’s lawyer.

The leader of the opposition Liberal Party, Bob Rae, said the government’s move to proceed with passing the bill despite last week’s court ruling is “an abuse of power”.

In an open market, farmers will lose the ability to collectively get the best possible price for their crops, Rae said. Some farm groups, however, say the board prevents them from gaining the best returns.

Ottawa expects the CWB to continue operating in an open market as a downsized wheat buyer.

Reporting By Rod Nickel; editing by Rob Wilson and Peter Galloway

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