Winnipeg, MB (Rural Roots Canada) – A Manitoba court has dismissed a class-action lawsuit brought by Western Canadian grain producers over money held in a contingency fund by the former Canadian Wheat Board (CWB).
In a decision released Oct. 7, the Manitoba Court of King’s Bench rejected claims against the federal government and the companies involved in the transition of the CWB to a private grain business.
The lawsuit sought up to $85.3 million in non-pool marketing gains that the class argued should have gone to producers who marketed grain through the board’s pool system between Aug. 1, 2010, and July 31, 2012.
The claim also sought almost $6 million over transition costs charged to pool accounts.
The CWB operated separate pool and non-pool marketing programs. Under the pool system, producers received initial payments and could receive a share of any surplus. Gains from non-pool programs, which offered different pricing and payment options, were credited to a contingency fund.
The class argued the increases allowed the government to retain money that should have been distributed to pool producers.
However, the judge found the increases had legitimate operational and risk-management reasons, including the growing participation in non-pool programs and exposure to market and foreign-exchange risks.
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The court also rejected the claim that the government committed misfeasance in public office, finding insufficient evidence that the minister knew the decisions were unlawful or intended to harm producers.
The judge found the grain receipts relied on by the class did not establish an enforceable contract entitling producers to the disputed funds. The court also found no breach of contract or wrongful allocation of the transition costs.
The motion for summary judgment was denied, and the claim was dismissed. The court granted summary judgment to the federal government, G3 Global Grain Group, and G3 Canada Limited.
The parties may address costs if they cannot reach an agreement.
The CWB was a federal statutory organization established in 1935 to market grain for Western Canadian farmers. It initially operated as a voluntary marketing program before becoming a compulsory marketing system under which farmers were generally required to sell their wheat through the board. The CWB operated both a pool system, in which producers received initial payments and could share in any surplus, and non-pool programs offering different pricing and payment options. Parliament ended the board’s single-desk marketing system in 2012, and the CWB was privatized, becoming G3 Canada Limited.
