Saturday, December 10, 2011

Federal Court of Canada Docket: T-1057-11 & Docket: T-1735-11 Citation : 2011 FC 1432

Federal Court

Cour fédérale

Date: 20111207

Docket: T-1057-11

Docket: T-1735-11

Citation : 2011 FC 1432

Winnipeg, Manitoba, December 7, 2011

PRESENT: The Honourable Mr. Justice Campbell

Docket: T-1057-11

BETWEEN:

FRIENDS OF THE CANADIAN WHEAT

BOARD, HAROLD BELL, DANIEL

GAUTHIER, KEN ESHPETER, TERRY

BOEHM, LYLE SIMONSON, LYNN

JACOBSON, ROBERT HORNE, WILF

HARDER, LAURENCE NICHOLSON,

LARRY BOHDANOVICH, KEITH RYAN,

ANDY BAKER, NORBERT VAN DEYNZE,

WILLIAM ACHESON, LUC LABOSSIERE,

WILLIAM NICHOLSON AND RENE SAQUET

Applicants

and

ATTORNEY-GENERAL OF CANADA,

THE MINISTER OF AGRICULTURE AND

AGRIFOOD IN HIS CAPACITY AS MINISTER

RESPONSIBLE FOR THE CANADIAN

WHEAT BOARD AND THE CANADIAN

WHEAT BOARD

and

COUNCIL OF CANADIANS, ETC GROUP

(ACTION GROUP ON EROSION,

TECHNOLOGY AND CONCENTRATION),

PUBLIC SERVICE ALLIANCE OF CANADA

AND FOOD SECURE CANADA

Respondents

Interveners

Page: 2

Docket: T-1735-11

AND BETWEEN:

THE CANADIAN WHEAT BOARD, ALLEN

OBERG, ROD FLAMAN, CAM GOFF, KYLE

KORNEYCHUK, JOHN SANDBORN, BILL

TOEWS, STEWART WELLS

AND BILLWOODS

Applicants

and

THE MINISTER OF AGRICULTURE AND

AGRIFOOD IN HIS CAPACITY AS MINISTER

RESPONSIBLE FOR THE CANADIAN

WHEAT BOARD

Respondent

and

PCSC – PRODUCER CAR SHIPPERS OF

CANADA INC., LOGAN CONNOR, LEONARD

GLUSKA, BILL WOODS, MYRON FINLAY,

HOWARD VINCENT, GLEN HARRIS,

AND TIM COULTER

Interveners

REASONS FOR ORDERS

[1] The present Applications concern the rule of law and the disregard for it by the

Respondent Minister of Agriculture (the Minister).

[2] The law concerned is s. 47.1 of the Canadian Wheat Board Act, RSC 1985, c C-24 (the

Act) which requires the Minister to engage in a consultative process with the Canadian Wheat Board

(CWB) and to gain the consent of Western Canadian wheat and barley producers with respect to

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proposed changes to the currently well-established process of marketing the grains in Canada. At

the present time, contrary to the requirements of s. 47.1, the Minister is unilaterally proceeding to

revolutionize the process by securing the imminent passage of legislation.

[3] A most recent reminder of the rule of law as a fundamental constitutional imperative is

expressed by Chief Justice Fraser in Reece v Edmonton (City), 2011 ABCA 238 at paragraphs 159

and 160:

The starting point is this. The greatest achievement through the

centuries in the evolution of democratic governance has been

constitutionalism and the rule of law. The rule of law is not the rule

by laws where citizens are bound to comply with the laws but

government is not. Or where one level of government chooses not to

enforce laws binding another. Under the rule of law, citizens have

the right to come to the courts to enforce the law as against the

executive branch. And courts have the right to review actions by the

executive branch to determine whether they are in compliance with

the law and, where warranted, to declare government action

unlawful. This right in the hands of the people is not a threat to

democratic governance but its very assertion. Accordingly, the

executive branch of government is not its own exclusive arbiter on

whether it or its delegatee is acting within the limits of the law. The

detrimental consequences of the executive branch of government

defining for itself – and by itself – the scope of its lawful power have

been revealed, often bloodily, in the tumult of history.

When government does not comply with the law, this is not merely

non-compliance with a particular law, it is an affront to the rule of

law itself […].

[Emphasis added]

[4] The Applicants each request a Declaration that the Minister’s conduct is an affront to the

rule of law. For the reasons that follow, I have no hesitation in granting this request.

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I. The Scheme of the Act

[5] The CWB is a corporation without share capital that is charged by s. 5 of the Act with the

statutory objective to “market in an orderly manner, in interprovincial and export trade, grain grown

in Canada.” The scheme of the Act is as follows: by Part III, the CWB is required to buy all wheat

and barley produced in Manitoba, Saskatchewan, Alberta, and the Peace River District of British

Columbia; Part IV prohibits any person other than the CWB from exporting, transporting from one

province to another, selling or buying wheat or barley, subject to limited exceptions established by

the Act or its regulations; and Part V establishes the mechanisms by which the CWB’s marketing

authority may be altered, and contains s. 47.1, the interpretation of which is at the centre of the

present Applications:

47.1 The Minister shall not

cause to be introduced in

Parliament a bill that would

exclude any kind, type, class

or grade of wheat or barley, or

wheat or barley produced in

any area in Canada, from the

provisions of Part IV, either in

whole or in part, or generally,

or for any period, or that

would extend the application

of Part III or Part IV or both

Parts III and IV to any other

grain, unless

(a) the Minister has consulted

with the board about the

exclusion or extension; and

47.1 Il ne peut être déposé au

Parlement, à l’initiative du

ministre, aucun projet de loi

ayant pour effet, soit de

soustraire quelque type,

catégorie ou grade de blé ou

d’orge, ou le blé ou l’orge

produit dans telle région du

Canada, à l’application de la

partie IV, que ce soit

totalement ou partiellement, de

façon générale ou pour une

période déterminée, soit

d’étendre l’application des

parties III et IV, ou de l’une

d’elles, à un autre grain, à

moins que les conditions

suivantes soient réunies :

a) il a consulté le conseil au

sujet de la mesure;

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(b) the producers of the grain

have voted in favour of the

exclusion or extension, the

voting process having been

determined by the Minister.

b) les producteurs de ce grain

ont voté — suivant les

modalités fixées par le ministre

— en faveur de la mesure.

[Emphasis added]

The “board” referred to in s. 47.1 (a) is that of the CWB charged under the Act to direct and manage

the business and affairs of the Corporation (the Board). The “producers” referred to in s. 47.1 (b) are

those persons that farm grain in the area named in Part III (the Producers).

II. The Introduction of Bill C-18

[6] On October 18, 2011, the Minister introduced in Parliament Bill C-18: An Act to reorganize

the Canadian Wheat Board and to make consequential and related amendments to certain Acts

(Marketing freedom for grain farmers Act). The name of the legislation proposed in Bill C-18

accurately states the nature of the changes to the governance structure of the CWB, and, indeed, the

whole system of the marketing of grain in Canada; what is considered to be marketing freedom for

grain farmers will replace the present centralized marketing system.

[7] At the present time, Bill C-18 has passed second reading at the Senate and is before the

Standing Senate Committee.

III. Issues

[8] The present Applications are simple in nature; they are directed at an examination of the

Minister’s conduct with respect the requirements of s. 47.1. The Applicants confirm that the

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validity of Bill C-18, and the validity and effects of any legislation which might become law as a

result of Bill C-18 are not in issue in the present Applications.

[9] The Applicants make it clear that their Applications are no threat to the Sovereignty of

Parliament to pass legislation. The controversy in the present case arises from the Act, legislation

that Parliament has already passed. Section 47.1 contains conditions which are known in law as

“manner and form” procedural requirements. This form of limitation on the exercise of legislative

power is well recognized in law. At paragraph 34 of the Producer Car Shippers argument, attention

is directed to the following passages from Professor Hogg’s text, Constitutional Law of Canada,

(Carswell, Toronto, 5th ed, 2007):

Would the Parliament or a Legislature be bound by self-imposed

rules as to the “manner and form” in which statutes were to be

enacted? The answer, in my view, is yes.

[…]

Thus, while the federal Parliament or a provincial Legislature cannot

bind itself as to the substance of future legislation, it can bind itself as

to the manner and form of future legislation.

[…]

It seems implausible that a legislative body should be disabled from

making changes to its present structure and procedures. Moreover,

the case-law, while not conclusive, tends to support the validity of

self-imposed manner and form requirements.

[Footnotes omitted]

(Motion Record of Producer Car Shippers, Tab 10)

[10] The Minister has attempted to argue that s. 47.1 does not meet the requirements of a

“manner and form” provision. I dismiss this argument and find any debate on “manner and form” is

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not properly before the Court for determination. Section 47.1 is presumed to be constitutionally

valid, and no argument challenging this presumption has been properly presented in the present

Applications; to do so would require notice of a Constitutional Question which has not been given.

Thus, as the judicial review Applications are framed, the sole question for determination is: did the

Minister breach the process requirements of s. 47.1, and if so, what relief, if any, should be granted?

The answer to this question requires a statutory interpretation analysis.

IV. The Applications

[11] Both the CWB and the Producers place heavy reliance on the democratic process

instrumental in the marketing of grain under the Act. The present Applications have been launched

to protect the process and the separate, but conforming interests, of the Producers under T-1075-11

and the CWB under T-1735-11.

[12] It is an undisputed fact that the Minister tendered Bill C-18 without conducting the

consultation and gaining the consent expressed in s. 47.1 of the Act. As expressed by Chief Justice

Fraser in the quote above: “courts have the right to review actions of the executive branch to

determine if they are in compliance with the law and, where warranted, to declare government

action unlawful.” Thus, I find that the Minister’s decision to not comply with the conditions

expressed in s. 47.1, prior to tabling Bill C-18, is judicially reviewable pursuant to section 18.1 (3)

(b) of the Federal Courts Act, RSC 1985, c F-7.

[13] As a result, the issue is whether the factual and legal basis has been established for making

Declarations that state fault on the part of the Minister. Each Application supports the making of a

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fault finding. The CWB supports the Producers’ argument in T-1057-11 and makes its own

argument on similar lines in T-1735-11. The CWB confirms this point as follows:

Although the Applications are framed somewhat differently, there is

significant overlap between the parties to, and the relief sought in, the

Applications. At their core, the Applications are each premised on

the failure of the Minister to comply with his statutory duty under

section 47.1 of the Act.

(Written Representations of the Canadian Wheat Board in T-1735-

11, para. 9)

[14] However, each Applicant frames the request for Declaratory relief in a slightly different

way. The Applicants in T-1057-11 express the claim for relief as follows:

(a) a declaration that the Minister breached his statutory duty to

consult with the Board and conduct a vote of wheat and barley

producers as to whether they agree with the removal of wheat and

barley from the application of Part IV of the Act and with the

elimination of the CWB’s exclusive statutory marketing mandate

(Breach Declaration);

and

(b) a declaration that the Minister breached the duty of fairness and

acted contrary to the legitimate expectations of producers in causing

the Bill to be introduced in Parliament without first consulting with

the Board and with producers through a producer vote (Legitimate

Expectation Declaration).

(Amended Notice of Application dated November 8, 2011)

And in T-1735-11 the Applicants express the request this way:

(a) a declaration that the Minister failed to comply with his statutory

duty pursuant to section 47.1 of the Act, to consult with the Board

and to hold a producer vote, prior to the causing to be introduced in

Parliament Bill C-18, An Act to reorganize the Canadian Wheat

Board and to make consequential and related amendments to certain

Acts ( “Bill”) (Breach Declaration);

and

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(b) a declaration that the Minister has acted in breach of the

legitimate expectations of the CWB, the Board and producers, and

contrary to the duty of fairness, in causing to be introduced in

Parliament the Bill without first consulting with the Board and

holding a producer vote (Legitimate Expectation Declaration);

(Notice of Application dated October 26, 2011)

[15] By consent, given the conjunction of both Applications, and the consolidated argument filed

by the Minister in response, it is appropriate to determine each Application with a separate order,

but on the basis of the present single set of consolidated reasons which addresses the core arguments

which have equal application to both.

[16] Two interventions have been permitted: that of the Council of Canadians, and ETC

Group, the Public Service Alliance of Canada and Food Secure Canada (the “Council”); and that

of the Producer Car Shippers of Canada Inc. et al (“Producer Car Shippers”). The Council

maintains an interest in food sovereignty, food safety, food security, and the important role that

the CWB plays in maintaining and protecting those interests, and has permission to address how

s. 47.1 is to be interpreted in accord with NAFTA and the Charter. The Producer Car Shippers

maintain an interest in protecting the rights and investments of grain producers who ship their

own grain, and have permission to address the application of the “manner and form” doctrine

with respect to s. 47.1 of the Act.

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V. Breach of the Law Challenge

A. The Test for Statutory Interpretation

[17] Whether the Minister breached the law is a matter of statutory interpretation and

consideration of the Minister’s conduct against that interpretation. I agree with the Applicants that

an appropriate test to be applied in the present Applications is as follows:

Today there is only one principle or approach, namely, the words of

an Act are to be read in their entire context and in the grammatical

and ordinary sense harmoniously with the scheme of the Act, the

object of the Act, and the intention of Parliament (Canada 3000 Inc,

Re: Inter-Canadian (1991) Inc (Trustee of), 2006 SCC 24 at para.

36; Bell ExpressVu Ltd Partnership v Rex, 2002 SCC 42 at para. 26).

(Applicants’ Memorandum of Fact and Law in T-1735-11, para. 44)

B. The Applicants’ Argument

[18] The Applicants argue that:

Properly interpreted in the context in which s. 47.1 and the 1998

amendments were adopted and the object underlying their enactment,

as well as the intention of Parliament, the ordinary sense of the broad

wording employed in s. 47.1 demonstrates that the Minister is

obligated to consult with the CWB and to hold a producer vote prior

to causing to be introduced in Parliament a bill that alters the CWB’s

exclusive marketing mandate; by causing the Bill to be introduced,

the Minister breached his statutory duty.

(Applicants’ Memorandum of Fact and Law in T-1735-11, para. 45)

[19] Thus, to the Applicants, history is important. The Act was first introduced in 1935, and in

1943 the CWB became a “Single Desk” which means the CWB became the sole marketing agency

for western Canadian wheat. This authority was extended to oats and barley in 1949, though the

marketing of oats was subsequently removed from the CWB’s exclusive jurisdiction in 1989.

Throughout this period government-appointed Commissioners managed the CWB; however, in

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1998, legislative amendments were introduced to improve the CWB’s marketing mandate and

structure to introduce democratic governance and greater accountability. The amendments

transferred control of the CWB to the farmers by creating a board of directors. Since 1998, twothirds

of the members of the board are elected directly by the grain producers. Section 47.1 was also

implemented at that time.

[20] Based on the historical context, the Applicants make the following arguments with respect

to the purpose of s. 47.1 and the scheme and the object of the Act :

In this case, the 1998 Amendments and section 47.1 were adopted in

response to increasing calls for greater farmer control over the

CWB’s operations and marketing mandate, including the demands of

some for dual marketing.

The creation of the Board, the majority of which was farmer-elected,

and the adoption of section 47.1 were in response to “the reasonable

expectations of a majority of western grain producers” and were

aimed at empowering farmers. The purpose of section 47.1 was to

ensure that “producers should be in control of any future changes to

the [CWB’s] mandate”.

[…]

The bill creates a dual marketing system in which Part IV, containing

the prohibitions on the export or interprovincial sale of wheat and

barley, is repealed, but the CWB remains as a purchaser of grain.

Section 47.1 was enacted by Parliament to ensure that the Minister

consulted with the Board and with producers prior to introducing

legislation to implement this very system.

[…]

The purpose of the 1998 Amendments is clear. The consistent

themes underlying the amendments were democracy, accountability,

flexibility and empowerment for farmers. Similarly, the purpose of

section 47.1 was to ensure that “farmers, not government, would be

in control of any future change to the [CWB’s] marketing authority”,

including the implementation of dual marketing and the elimination

of the Single Desk.

Page: 12

(Applicants’ Memorandum of Fact and Law in T-1735-11, paras. 47-

48, 50, and 58)

[21] With respect to the intention of Parliament in introducing s. 47.1, from the body of evidence

presented by the Applicants, I find the following statements of the former Minister responsible for

the CWB to be particularly cogent:

House of Commons, October 7, 1997:

Virtually every marketing innovation which farmers have debated

over the past several years will be possible under this new law. In a

nutshell, that is what Bill C-4 is all about, empowering producers,

enshrining democratic authority which has never existed before,

providing new accountability, new flexibility and responsiveness,

and positioning farmers to shape the kind of wheat board they want

for the future (Affidavit of Allen Oberg, September 15, 2011, para.

38, Exhibit 7);

House of Commons, February 17, 1998:

Such a change would have eliminated the problematic clauses while

respecting and enshrining the fundamental principle of democratic

producer control;

[…]

Tonight, at long last, Bill C-4 will come to a vote at third reading. Its

passage will signal an era of change for the future. Its major themes

are democracy, accountability, flexibility and empowerment for

farmers.

Farmers will take control. They will have it within their authority to

shape their marketing agency as they see fit. I have complete

confidence in the judgment of producers to exercise their new

authority with strength, wisdom and prudence to the greater and

greater success of the prairie farm economy and prairie farmers most

especially (Affidavit of Allen Oberg, September 15, 2011, para. 40,

Exhibit 9);

Senate Committee, May 5, 1998:

Page: 13

The amendment would require that if any future minister responsible

for the [CWB] decides that it is appropriate public policy to change

the mandate of the [CWB], to make it either bigger or smaller, it

would be up to him to make that policy determination. But he would

be required to conduct a vote in advance to obtain the consent of

farmers (Affidavit of Allen Oberg, September 15, 2011, para. 42,

Exhibit 11).

[Emphasis in the original]

[22] In addition, the Former Minister repeatedly confirmed that s. 47.1 requires a Producer vote

if a proposed change is “significant or fundamental”:

Policy Statement, “Changes in Western Grain Marketing”, October

7, 1996:

The proposed legislation will provide for future mandate changes

contingent upon the formal considered advice of the CWB board of

directors and, if a quality control issue is involved, the formal

certification by the Canadian Grain Commission that a change can in

fact be made without jeopardizing the world-renowned Canada

reputation for high quality, consistency and dependability. If the

CWB directors consider any proposed change to be significant or

fundamental, a producer vote would be a prerequisite before

implementation [Emphasis added] (Record of the CWB, Tab 3, p.

112);

Standing Committee on Agriculture and Agri-Food, Meeting No. 57,

December 12, 1996:

In future the Wheat Board’s mandate may be adjusted, conditional

upon three things: first of all, a clear recommendation to that effect

by the directors of the Canadian Wheat Board; secondly, if a quality

control issue is involved, the unequivocal concurrence of the

Canadian Grain Commission that a change can be made safely

without damaging Canada’s reputation for quality and consistency;

and third, if the proposed change is significant or fundamental, then

an affirmative vote among farmers would need to be a prerequisite

[Emphasis added] (Record of the CWB, Tab 4, p. 125).

[23] The Council submits that the intention of Parliament can be evidenced by the invocation of

international trade obligations as a rationale for the 1998 Amendments by the Former Minister. The

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democratic nature of s. 47.1, which mandates producer control, was considered necessary in order to

defend the CWB’s marketing practices in the face of the NAFTA. The Former Minister stated that

s. 47.1 was intended to prevent the Act from being “used as some thinly veiled excuse by our

competitors, perhaps the United States, to launch some form of trade harassment” (House of

Commons, February 17, 1998; Affidavit of Allen Oberg, September 15, 2011, Exhibit 9; Council

Memorandum of Fact and Law, paras. 8-14).

[24] The Council effectively argues that, when in doubt, statutory interpretation must have regard

to democratic and constitutional values. In the present case this is especially important because s.

47.1 speaks to the unique situation in which these democratic values are already implemented in the

structure of the CWB. This fact requires that, in proposing that a fundamental change be made to

the structure, the Minister must act democratically. This is what s. 47.1 says. Not adhering to these

values is not only disrespectful, it is contrary to law.

C. The Minister’s Response

[25] The Minster advances the following statutory interpretation argument:

The Applicants contend that section 47.1 should be read expansively

in such a way as to require the Minister to seek and to obtain a

favourable producer vote before being allowed to introduce any bill

“that alters the CWB’s exclusive marketing mandate.” In an

affidavit filed by the CWB in these proceedings, the Chair of its

board of directors states the CWB position as being “ […] simply

that farmers, not the government, should decide the future of the

Single Desk in a vote held in accordance with section 47.1 of the

Act.”

The clear wording of the section 47.1, however, refers only to the

addition or subtraction of particular grains or types of grain from the

marketing regime as it is established in Parts III and IV of the Act. It

does not refer to limiting the future repeal of the Act itself or to any

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other changes. It leaves the future of the “single desk” as a matter for

Parliament to decide.

Section 47.1 is found in Part V under the heading, “OTHER GRAINS

– APPLICATION OF PARTS III AND IV,” which means that, not

only in its wording but in its statutory context as well, it is clearly

directed only to the addition or subtraction of particular grains in

Parts III and IV. The future of the “single desk” is a policy and

legislative decision for Parliament, not for the Court.

[…]

Properly interpreted, the scope of section 47.1 addresses the

inclusion or exclusion of particular grains or types of grain. Given

the principle of Parliamentary sovereignty, section 42(1) of the

Interpretation Act, and the clear wording of section 47.1 found under

the statutory heading “OTHER GRAINS – APPLICATION OF

PARTS III AND IV”, this provision cannot be so broadly interpreted,

as urged by the Applicants, as to place a perpetual veto in the hands

of each category of grain producers over the continued existence of

the marketing regime, or on the repeal of the Act itself.

Understanding the crucial distinction between removing types of

wheat or barley from the application of Part IV of the Act and

repealing the entire Act itself is fundamental to the correct

interpretation of section 47.1. Bill C-18 does not remove a particular

type of prairie wheat or barley from the application of Part IV of the

Act. Rather, Bill C-18 repeals the Act, thereby terminating the

CWB’s marketing monopoly in order to replace it with a new regime

that allows all grain producers the freedom to market and sell their

grain as they choose, including through the CWB if they so decide.

[Emphasis in original]

[Footnote removed]

(Respondents’ Consolidated Memorandum of Fact and Law, paras.

31-33; 38-39)

[26] The Minister relies upon the following evidentiary statements in support of the interpretation

argument:

a. A government news release issued in September 1997 concerning the

then Bill C-4 (into which section 47.1 was eventually added in the

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course of Parliamentary deliberations) stated that the concept of

farmer control was directed to the potential exclusion or inclusion of

various types of grains into the system (Affidavit of Allen Oberg,

September 15, 2011, Exhibit 6);

b. The Minister, at second reading in the House of Commons of the

Bill containing section 47.1, stated that:

[t]his new law will also empower producers to

determine democratically what is and what is not

under the Canadian Wheat Board’s marketing

jurisdiction.

[Emphasis in original]

(Affidavit of Allen Oberg, September 15, 2011, Exhibit 7);

c. Clauses 23 and 26 of Bill C-4 show that the arrangements for

exclusion and inclusion of grains would take place by regulation. It is

clear that changes such as the abolition of the “single desk” or the

repeal of the Act in the future were not the type of changes to which

the new provisions were intended to apply (Affidavit of Allen Oberg,

September 15, 2011, Exhibit 8);

d. Commenting on an amendment to the bill that would become section

47.1, the Minister testified before the Standing Senate Committee on

Agriculture and Forestry on May 5, 1998. The Minister referred to

the inconsistency that had historically marked the methods by which

inclusions and exclusions of various grains, such as oats and barley,

had previously taken place – sometimes by Order in Council and

sometimes by statutory amendment. When the Minister stated, “…it

is unclear how one goes about amending the jurisdiction of the

Canadian Wheat Board”, he had in mind the problem of moving

various grains in or out of the regime that the CWB administered. He

was not referring to more fundamental changes to the nature or

existence of the marketing regime itself (Affidavit of Allen Oberg,

September 15, 2011, Exhibit 11);

e. When the Secretary of State moved second reading in the House of

Commons and concurrence in the amendments made in the Senate to

Bill C-4, including the clause that is now section 47.1, the Secretary

of State stated:

The second area of Bill C-4 where the Senate has

proposed amendments concerns the means by which

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the number of grains under the marketing regime of

the wheat board can be either expanded or reduced.

As originally, drafted, western Canadian producers

had a process for excluding any kind, type, class or

grade of wheat or barley from the marketing authority

of the board. Similarly, the bill also laid out an

inclusion process for adding crops to the mandate of

the wheat board.

The amendment filled a gap in the existing Wheat

Board Act. As it now stands under the Canadian

Wheat Board, the process for changing the Canadian

Wheat Board’s mandate is unclear, as every member

from prairie Canada I am sure knows.

There have been concerns expressed by producers

and producer groups about the mechanism for

inclusion and exclusion originally laid out in Bill C-4.

Plenty of concerns have been expressed.

I am sure my colleagues from the opposition party are

going to get up very shortly and tell me why the

matter has not been set right yet.

The amendment responds to those concerns. The

amendment would replace existing clauses related to

the inclusion-exclusion of grains with the provision

that would require the current and future ministers

responsible for the board to consult the board of

directors with its two-thirds majority of farmer

chosen members and conduct a vote among

producers before any grains are added or removed

from the mandate of the board.

(Affidavit of Allen Oberg, September 15, 2011, Exhibit 12)

[Emphasis in Original]

(Respondents’ Consolidated Memorandum of Fact and Law, para.

47)

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D. Conclusions

[27] I find that by applying the interpretation test as set out above, the Applicants’ argument

which relies upon a contextual historical approach with respect to the unique democratic nature of

the CWB, and its importance, is compelling. I accept the argument that the CWB’s democratic

marketing practices are “significant and fundamental” because they are long standing, and strongly

supported by a large number of the some 17,000 grain producers in Western Canada. This support is

worthy of respect; the following argument on the rule of law made by the Council makes this clear:

The rule of law is a multi-faceted concept, conveying “a sense of

orderliness, of subjection to known legal rules and of executive

accountability to legal authority.” The Courts have repeatedly

described the rule of law as embodying the principle that the law “is

supreme over officials of the government as well as private

individuals, and thereby preclusive of the influence of arbitrary

power.” In other words, for political action to be legitimate, decisionmaking

must operate within the constraints of the law. Governments

cannot flout the law and must respect legitimate legal processes

already in place. As the Supreme Court stated in the Secession

Reference, “[i]t is the law that creates the framework within which

the “sovereign will” is to be ascertained and implemented. To be

accorded legitimacy, democratic institutions must rest, ultimately, on

a legal foundation.”

Adhering to the rule of law ensures that the public can understand the

rules they are bound by, and the rights they have in participating in

the law-making process. As the Applicants note, western farmers

relied on the fact that the government would have to conduct a

plebiscite under s. 47.1 before introducing legislation to change the

marketing mandate of the CWB. Disregarding the requirements of s.

47.1 deprives farmers of the most important vehicle they have for

expressing their views on the fundamental question of the single

desk. Furthermore the opportunity to vote in a federal election is no

answer to the loss of this particular democratic franchise. Until the

sudden introduction of Bill C-I8, Canadian farmers would have

expected the requirements of s. 47.1 to be respected.

The rule of law must therefore inform the interpretation of s. 47.1,

which sets out a process that includes consultation and a democratic

vote prior to abolishing the single desk. An interpretation of s. 47.1

Page: 19

that is consistent with the rule of law would give effect to the plain

meaning of its words as ordinary citizens would understand and

interpret them, and not in a manner that defeats the consultative

purpose of s. 47.1 — particularly, given that citizens and

stakeholders understood s. 47.1 to provide them with particular rights

and acted in accordance with that understanding.

[Footnotes excluded]

(Memorandum of Fact and Law of the Council, paras. 26-28)

[28] I give weight to the Council’s argument that s. 47.1 applies to changing the structure of the

CWB because the democratic structure is important to Canada’s international trade obligations

under NAFTA. I find that this is an important consideration which supports the argument that

Parliament’s intention in s. 47.1 is not to alter this structure without consultation and consent.

[29] However, the Applicants’ statutory interpretation, which I accept, should not be considered

to the exclusion of the Minister’s interpretation which focuses on the words used in s. 47.1 itself. In

my opinion, the correct interpretation of the provision includes both perspectives. In my opinion, to

accept the Minister’s interpretation to the exclusion of the Applicants’ would results in an absurdity,

a condition which is to be avoided.

[30] By construing the liberal interpretation of the Act which best ensures the attainment of its

objects, I find that the Act was intended to require the Minister to consult and gain consent where an

addition or subtraction of particular grains or types of grain from the marketing regime is

contemplated, and also in respect of a change to the democratic structure of the CWB. As the

Applicants argue, it is unreasonable to interpret the Act to conclude that while the Minister must

Page: 20

consult and gain consent when extracting or extending a grain, she or he is not required to consult or

gain consent when dismantling the CWB; the point is made as follows:

… Under the Minister’s interpretation of section 47.1, farmers would

be denied a vote “when it is most needed”, namely, in circumstances

where the CWB’s exclusive marketing mandate is to be eliminated.

That interpretation is not only inconsistent with the principle that the

words of a statute must be placed in context, but is contrary to

common sense.

(Applicants’ Memorandum of Fact and Law in T-1735-11, para. 52)

[31] Section 39 of Bill C-18 proposes to replace the whole marketing scheme of wheat in Canada

by repealing the Act after a transition period. I find that it was Parliament’s intention in introducing

s. 47.1 to stop this event from occurring without the required consultation and consent.

VI. Legitimate Expectations

[32] As an alternative argument, the Applicants maintain that the Minister has failed to meet

legitimate expectations. The Supreme Court of Canada describes a legitimate expectation as

follows:

It affords a party affected by the decision of a public official an

opportunity to make representations in circumstances in which there

would be no such opportunity. The court supplies the omission

where, based on the conduct of the public official, a party has been

led to believe that his or her rights would not be affected without

consultation.

(Old St Boniface Residents Association Inc v Winnipeg (City), [1990]

3 SCR 1170, at para. 110)

During the course of oral argument, the Applicants confirmed that, should they be successful on the

s. 47.1 breach argument, they would be content with that as the single result of the Applications.

Therefore, I exercise my discretion not to grant the Legitimate Expectation Declaration requests.

Page: 21

VII. Conclusion

[33] The Minister argues that the declarations should not be granted because their effect would

be meaningless. In response, I say that there are two meaningful effects of granting the Breach

Declarations.

[34] The first effect is that a lesson can be learned from what has just occurred. Section 47.1

speaks, it says: “engage in a consultative process and work together to find a solution.” The change

process is threatening and should be approached with caution. Generally speaking, when advancing

a significant change to an established management scheme, the failure to provide a meaningful

opportunity for dissenting voices to be heard and accommodated forces resort to legal means to

have them heard. In the present piece, simply pushing ahead without engaging such a process has

resulted in the present Applications being launched. Had a meaningful consultative process been

engaged to find a solution which meets the concerns of the majority, the present legal action might

not have been necessary. Judicial review serves an important function; in the present Applications

the voices have been heard, which, in my opinion, is fundamentally importantly because it is the

message that s. 47.1 conveys.

[35] The second and most important effect is that the Minister will be held accountable for his

disregard for the rule of law.

[36] I find it is fair and just to issue the Breach Declaration on each Application.

“Douglas R. Campbell”

Judge

FEDERAL COURT

SOLICITORS OF RECORD

DOCKETS: T-1057-11 and T-1735-11

STYLE OF CAUSE: T-1057-11

FRIENDS OF THE CANADIAN WHEAT BOARD, ET

AL. v. ATTORNEY GENERAL OF CANADA, ET AL.

and COUNCIL OF CANADIANS, ET AL. (Interveners)

T-1735-11

THE CANADIAN WHEAT BOARD, ET AL. v. THE

MINISTER OF AGRICULTURE AND AGRIFOOD IN

HIS CAPACITY AS MINISTER RESPONSIBLE FOR

THE CANADIAN WHEAT BOARD and PCSC –

PRODUCER CAR SHIPPERS OF CANADA INC.

(PRODUCER CAR SHIPPERS), ET AL. (Interveners)

PLACE OF HEARING: Winnipeg, Manitoba

DATE OF HEARING: December 6, 2011

REASONS FOR ORDER: CAMPBELL J.

DATED: December 7, 2011

APPEARANCES:

Anders Bruun

FOR THE APPLICANTS

FRIENDS OF THE CANADIAN WHEAT BOARD,

HAROLD BELL, DANIEL GAUTHIER, KEN

ESHPETER, TERRY BOEHM, LYLE SIMONSON,

LYNN JACOBSON, ROBERT HORNE, WILF

HARDER, LAURENCE NICHOLSON, LARRY

BOHDANOVICH, KEITH RYAN, ANDY BAKER,

NORBERT VAN DEYNZE, WILLIAM ACHESON,

LUC LABOSSIERE, WILLIAM NICHOLSON AND

RENE SAQUET

(IN T-1057-11)

Page: 2

Joel Katz FOR THE RESPONDENTS

ATTORNEY GENERAL OF CANADA, THE

MINISTER OF AGRICULTURE AND AGRIFOOD

IN HIS CAPACITY AS MINISTER RESPONSIBLE

FOR THE CANADIAN WHEAT BOARD

(IN T-1057-11)

John Lorn McDougall, Q.C. and

Matthew Fleming

Stephen Shrybman

John Lorn McDougall, Q.C. and

Matthew Fleming

James E. McLandress

Joel Katz

John B. Martens and

Colin R. MacArthur, Q.C.

FOR THE RESPONDENT

THE CANADIAN WHEAT BOARD

(IN T-1057-11)

FOR THE INTERVENERS

COUNCIL OF CANADIANS, ETC GROUP

(ACTION GROUP ON EROSION, TECHNOLOGY

AND CONCENTRATION), PUBLIC SERVICE

ALLIANCE OF CANADA AND FOOD SECURE

CANADA

(IN T-1057-11)

FOR THE APPLICANTS

THE CANADIAN WHEAT BOARD, ALLEN

OBERG, ROD FLAMAN, CAM GOFF, KYLE

KORNEYCHUK, JOHN SANDBORN, BILL

TOEWS, STEWART WELLS AND BILL WOODS

(IN T-1735-11)

FOR THE APPLICANTS

(IN T-1735-11)

FOR THE RESPONDENTS

THE MINISTER OF AGRICULTURE AND

AGRIFOOD IN HIS CAPACITY AS MINISTER

RESPONSIBLE FOR THE CANADIAN WHEAT

BOARD

(IN T-1735-11)

FOR THE INTERVENERS

PCSC – PRODUCER CAR SHIPPERS OF

CANADA INC. (PRODUCER CAR SHIPPERS),

LOGAN CONNOR, LEONARD GLUSKA, BILL

WOODS, MYRON FINLAY, HOWARD VINCENT,

GLEN HARRIS, AND TIM COULTER, ON THEIR

OWN BEHALF AND ON BEHALF OF THE

MEMBERS OF PRODUCER CAR SHIPPERS

(IN T-1735-11)

Page: 3

SOLICITORS OF RECORD:

Anders Bruun

Barrister & Solicitor

Winnipeg, Manitoba

FOR THE APPLICANTS

FRIENDS OF THE CANADIAN WHEAT BOARD,

HAROLD BELL, DANIEL GAUTHIER, KEN

ESHPETER, TERRY BOEHM, LYLE SIMONSON,

LYNN JACOBSON, ROBERT HORNE, WILF

HARDER, LAURENCE NICHOLSON, LARRY

BOHDANOVICH, KEITH RYAN, ANDY BAKER,

NORBERT VAN DEYNZE, WILLIAM ACHESON,

LUC LABOSSIERE, WILLIAM NICHOLSON AND

RENE SAQUET

(IN T-1057-11)

Myles J. Kirvan, Q.C.

Deputy Attorney General of Canada

FOR THE RESPONDENTS

ATTORNEY GENERAL OF CANADA, THE

MINISTER OF AGRICULTURE AND AGRIFOOD

IN HIS CAPACITY AS MINISTER RESPONSIBLE

FOR THE CANADIAN WHEAT BOARD

(IN T-1057-11)

FOR THE RESPONDENTS

THE MINISTER OF AGRICULTURE AND

AGRIFOOD IN HIS CAPACITY AS MINISTER

RESPONSIBLE FOR THE CANADIAN WHEAT

BOARD

(IN T-1735-11)

Fraser Milner Casgrain LLP

Barristers & Solicitors

Toronto, Ontario

James E. McLandress

Barrister & Solicitor

Winnipeg, Manitoba

FOR THE RESPONDENT

THE CANADIAN WHEAT BOARD

(IN T-1057-11)

FOR THE APPLICANTS

THE CANADIAN WHEAT BOARD, ALLEN

OBERG, ROD FLAMAN, CAM GOFF, KYLE

KORNEYCHUK, JOHN SANDBORN, BILL

TOEWS, STEWART WELLS AND BILL WOODS

(IN T-1735-11)

FOR THE APPLICANTS

THE CANADIAN WHEAT BOARD, ALLEN

OBERG, ROD FLAMAN, CAM GOFF, KYLE

KORNEYCHUK, JOHN SANDBORN, BILL

TOEWS, STEWART WELLS AND BILL WOODS

(IN T-1735-11)

Page: 4

Sack Goldbatt Mitchell LLP

Barristers & Solicitors

Ottawa, Ontario

Aikins MacAulay & Thorvaldson LLP

Barristers & Solicitors

Winnipeg, Manitoba

FOR THE INTERVENERS

COUNCIL OF CANADIANS, ETC GROUP

(ACTION GROUP ON EROSION, TECHNOLOGY

AND CONCENTRATION), PUBLIC SERVICE

ALLIANCE OF CANADA AND FOOD SECURE

CANADA

(IN T-1057-11)

FOR THE INTERVENERS

PCSC – PRODUCER CAR SHIPPERS OF

CANADA INC. (PRODUCER CAR SHIPPERS),

LOGAN CONNOR, LEONARD GLUSKA, BILL

WOODS, MYRON FINLAY, HOWARD VINCENT,

GLEN HARRIS, AND TIM COULTER, ON THEIR

OWN BEHALF AND ON BEHALF OF THE

MEMBERS OF PRODUCER CAR SHIPPERS

(IN T-1735-11)