Supreme Court won't hear farmers' appeal of $17B wheat board lawsuit

The Supreme Court of Canada has declined to hear an appeal from a farmer-led group seeking $17 billion in damages from the federal government for dismantling the Canadian Wheat Board's marketing monopoly.

Thursday's decision comes after the Federal Court of Appeal agreed in October with a lower court ruling from 2013 that the grain producers' class-action lawsuit claiming expropriation and breach of trust should not proceed.

However, one smaller part of the case the Federal Court had allowed, valued at around $100 million, will proceed for certification as a class-action lawsuit in the coming months.

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Four named farmers launched the lawsuit in 2012 on behalf of former wheat board members and other stakeholders who fought the Conservative government's 2011 legislation to dismantle the Canadian Wheat Board's exclusive right to sell Prairie wheat and barley.

They argued that the government's decision to end the monopoly and commercialize the CWB as just one among many private sector grain companies effectively seized collective assets farmers had paid for over decades.

They also argued billions of dollars of goodwill was lost when the CWB's main competitive advantage, its marketing monopoly, ended.

The farmers believe that the "highly dysfunctional" marketing system now in place for Canadian wheat and barley cost producers as much as $5 billion in 2013-14.

They say that the price spread between what farmers received and what the grain was ultimately sold at in 2014-15 incurred some $3 billion in producer losses.

"Those price spreads have not returned to competitive levels, so farmer losses continue to mount," a press release issued by the Friends of the Canadian Wheat Board said Thursday.

"We have to recognize that Canada's position in the international grain trade has now been severely damaged by Ottawa's ideologically based exercise in grain marketing and quality control," spokesman Stewart Wells said in the release.

'Marketing freedom' upheld

The government is currently proceeding with plans to commercialize the CWB, which was run by a mixed board of farmer-elected and government-appointed directors until 2011.

Late last year, it appeared the government was getting ready to hand over the remaining assets of the CWB to a private sector investor in a sort of reverse-nationalization of the former Crown corporation.

In a statement issued today, Agriculture Minister Gerry Ritz said the Supreme Court's decision not to hear the farmers' appeal "once again upholds Western Canadian farmers' right to marketing freedom."

"The overwhelming majority of farmers have embraced the new economic opportunities created by marketing freedom and are taking Canadian agriculture to record heights," the release said. "Marketing freedom is and will remain the law of the land."

Many of the same farmers involved in the lawsuit fought and lost an earlier court battle to stop the 2011 legislation that dismantled the monopoly, based on arguments that the actions of Stephen Harper's government broke the law.

Wells said his group's attention now turns to the remaining part of the lawsuit that will proceed: an effort to recoup for farmers allegedly misallocated pool account funds from 2011-12, the final year of the monopoly's operations.

The final amount of this smaller class action, should it be certified, could be in the tens or hundreds of millions of dollars, as opposed to the billions the original application sought.

Justice Marc Nadon from the Federal Court of Appeal, whose appointment to the Supreme Court was declared unconstitutional a year ago, delivered the October ruling which now stands.

A separate class-action suit organized by the Merchant Law Group, launched in 2012 and seeking $15.4 billion on behalf of producers remains.