Date: 20090209
Docket: T-612-06
Citation: 2009 FC 129
Ottawa, Ontario, February 9,
2009
PRESENT: The Honourable Mr. Justice O'Reilly
BETWEEN:
RENOVA HOLDINGS LTD., JOHN
JACKSON,
AND DAVE BOUCHARD EACH ON THEIR
OWN BEHALF AND ON BEHALF OF
ALL PERSONS WHO HAVE BEEN
PRODUCERS OR ARE PRODUCERS AND
DO RESIDE OR HAVE RESIDED IN
THE DESIGNATED AREA BETWEEN
JULY 5, 1935 AND THE PRESENT DAY
Applicants
and
THE CANADIAN WHEAT BOARD AND
THE ATTORNEY GENERAL OF CANADA
Respondents
REASONS FOR JUDGMENT AND JUDGMENT
[1]
The applicants allege that the Canadian Wheat
Board has wrongly been paying some of its expenses out of funds that are meant
to be distributed to wheat producers. They say that the Canadian Wheat Board
Act, R.S.C. 1985, c. C-24 makes clear that the Board can deduct from
revenues arising from wheat sales only those expenses that the Board incurred
in relation to particular wheat products. Expenses that the Board incurred in
respect of other activities, however beneficial, should be paid by Parliament,
not by wheat farmers. They ask me to declare that the Board has made improper
expenditures and to order an accounting to determine the amounts wrongly
deducted.
[2]
The respondents maintain that the Board’s
actions are authorized by the Act, respect proper accounting practices, benefit
wheat producers in Canada, and
are consistent with its statutory mandate.
[3]
The applicants have not persuaded me that the
Board’s conduct is unauthorized by law or otherwise improper. Accordingly, I
must dismiss this application for judicial review.
[4]
The parties agree that the sole issue to be
decided is whether the Board had authority to deduct certain expenses from
so-called “pool accounts”. They have focussed on the situation in 2002 as a
representative year.
I.
Statutory Framework
[5]
The Board has an exclusive mandate to market
grain grown in a “designated area” of Canada if the grain is intended for
export or for human consumption within Canada (s. 5; relevant provisions of
the Act are set out in an Annex). The “designated area” consists of Manitoba, Saskatchewan, Alberta and the Peace River area of British Columbia (s. 2(1)). The Board sells
millions of tonnes of grain nationally and internationally on behalf of about
75,000 farmers.
[6]
The philosophy underlying the Act is that farmers
are best served by a system in which a major corporation, the Board, bargains
on their behalf for the best return on their grain and spreads the costs of
doing business across the Canadian breadbasket. The respondents estimate that
this system creates a net premium for Canadian grain producers of between $355
million and $405 million a year.
[7]
Total revenues are in the range of $4 billion
annually. Once expenses are deducted, the remainder (about 90%) is returned to
farmers. In effect, then, the Board’s expenses are borne by Canadian grain
farmers.
[8]
Under the Act, grain is divided into separate
“pools” – wheat, durum, feed barley and designated (i.e., malt or
selected) barley. The Act requires the Board to keep separate accounts for each
pool (s. 36). Also, the Act instructs the Board that, as soon as it receives
payment in full for the wheat sold or delivered to it, it must then deduct from
revenues “expenses incurred in connection with the operations of the
Corporation attributable to that wheat” (s. 33(1)(a)). Those expenses
include remuneration and expenses for directors, officers and employees (s.
33(1)(a)(i), (i.1), (ii)). Any losses sustained by the Board are to be
paid by Parliament (s. 7(3)).
II.
The Expenses of Concern to the Applicants
[9]
The applicants have identified a number of
expenses paid by the Board that are, in their view, unauthorized by the Act:
·
The costs associated with issuing “export
licenses” in respect of grain that does not come from within the designated
area.
·
Research and development spending (e.g.,
grants to universities and other organizations to research, for example, new
varieties of wheat and other grains).
·
Costs associated with legal proceedings,
particularly those associated with gaining (and maintaining) access to the United States market under NAFTA.
·
Bonuses paid to Board employees.
·
Pursuing some marketing-related issues (e.g.,
education on genetically modified wheat, or advocating for cheaper grain
transportation for farmers).
[10]
These expenses, according to the applicants,
ought not to be charged against the pool accounts because they are not
“attributable to that wheat” (i.e., any particular pool). Therefore,
they are unauthorized by s. 33(1)(a) of the Act. If they are to be paid
at all, they should be regarded as “losses” and paid by Parliament under s.
7(3).
III.
Did the Board have Authority to Deduct the
Expenses in Issue from the Pool Accounts?
[11]
The applicants do not suggest that the expenses
described above are wholly without benefits. Rather, they contest the legal
authority for incurring them. The Board maintains that the Act permits it to
deduct expenses relating to each pool, as well as expenses incurred across
pools. In the latter case, the Board determines what proportion of the
particular expense is attributable to each of the respective pools. It submits
that this is what is meant by the Act’s requirement that expenses be tied to
the Board’s operations that are “attributable to that wheat” (s. 33(1)(a)).
[12]
In my view, the Board’s interpretation of the
Act is correct. The Act requires the Board to allocate expenses to particular
pool accounts. This is true whether the expense is incurred only in relation to
a particular wheat product, or the expense is one which is common to more than
one, or all, of the pools.
[13]
I note that the Board’s methodology for
deducting expenses and distributing revenues to farmers had been approved by
its own auditors, as well as by the Auditor General. After a review of the
Board’s accounts, the Auditor General concluded that the Board “calculates the
total net pooled returns in accordance with the requirements of the CWB Act”
and that “all revenues from the sale of grain, less operating costs, were
properly distributed to farmers”.
[14]
Further, the expenses that are of primary
concern to the applicants clearly further the interests of grain farmers as a
whole. For example, the Board’s administration of export licenses to producers
outside the designated area is a means of monitoring and controlling grain
sales as a whole. This allows the Board to ensure that there is no “leakage” of
grain from the designated area and to protect the integrity of the pools. In
any case, the Board estimates that the annual administrative cost associated
with export licenses relating to grain produced outside the designated is only
about $5,000. To take another example, with respect to legal costs, these were
incurred as a result of efforts the Board made in opposing trade barriers and
defending grain farmers’ interests in the courts. In sum, the Board’s expenditures
appear to be consistent with its statutory purpose.
IV Conclusion
[15]
The disputed expenses are authorized by the Act
and are properly allocated by the Board to the respective pool accounts.
Accordingly, there is no basis for overturning the Board’s treatment of those
expenses. I must, therefore, dismiss this application for judicial review, with
costs.
JUDGMENT
THIS COURT’S JUDGMENT IS
that:
1.
The
application for judicial review is dismissed, with costs.
“James
W. O’Reilly”
Annex “A”
|
Canadian Wheat Board Act, R.S.C. 1985, c. C-24
Binding on Her Majesty
2.1 This Act is binding on Her Majesty in right of Canada
or a province.
Object
5. The Corporation is incorporated with the
object of marketing in an orderly manner, in interprovincial and export
trade, grain grown in Canada.
Losses
7.(3) Losses sustained by the Corporation
(a) from its
operations under Part III in relation to any pool period fixed thereunder,
during that pool period, or
(b) from its
other operations under this Act during any crop year,
for which no provision is made in any other Part, shall be paid out of
moneys provided by Parliament.
Deductions from receipts
33. (1) As soon as the Corporation receives payment
in full for all wheat sold and delivered to it during a pool period and all
credit sales of the wheat in respect of which payment is guaranteed under
section 19 have been concluded, there shall be deducted, from the aggregate
of the total amount so received, the principal so guaranteed and any interest
that accrues during that pool period in respect of sales of wheat on credit
concluded during any pool period, all moneys disbursed by or on behalf of the
Corporation
(a) by way of payment in
respect of that wheat and by way of expenses incurred in connection with the
operations of the Corporation attributable to that wheat, including
(i) the remuneration and allowances of the officers,
clerks and employees of the Corporation,
(i.1) the remuneration and expenses of the directors of
the Corporation,
(i.2) the costs of an election of directors of the
Corporation in accordance with sections 3.06 to 3.08,
(ii) the necessary travel, living and other expenses
incurred in the discharge of duties under this Act by the persons referred to
in subparagraph (i),
Separate accounts
36. The Corporation shall maintain separate
accounts with regard to its operations in respect of wheat produced in the
designated area sold and delivered to it during each pool period by
producers.
|
Loi sur la commission canadienne du blé, L.R.C. 1985, ch. C-24
Obligation de Sa Majesté
2.1 La présente loi lie Sa Majesté du chef du Canada ou d’une
province.
Mission
5. La
Commission a pour mission d’organiser, dans le cadre du marché
interprovincial et de l’exportation, la commercialisation du grain cultivé au
Canada.
Pertes
7.(3) Sont imputées aux crédits affectés par le
Parlement, sauf disposition contraire d’une autre partie, les pertes subies
par la Commission :
a) dans le
cas des opérations visées à la partie III et se rapportant à une période de
mise en commun fixée aux termes de cette partie, au cours de la période de
mise en commun en question;
b) dans le
cas des autres opérations prévues par la présente loi, au cours d’une
campagne agricole.
Montants à prélever
33. (1) Dès que, d’une part, elle
est payée intégralement pour le blé qui lui a été vendu et livré au cours de
la période de mise en commun et, d’autre part, les ventes de blé à crédit
auxquelles s’applique la garantie visée à l’article 19 ont été conclues pour
cette période, la Commission prélève sur le total des sommes ainsi payées, du
principal garanti et de l’intérêt échu dans cette période — y compris celui
afférent à une vente à crédit conclue dans une période antérieure — les
sommes suivantes au titre des dépenses qu’elle a engagées ou qui l’ont été en
son nom :
a) le prix d’achat du blé et les frais afférents aux opérations
qu’elle a effectuées sur celui-ci, y compris :
(i) la rémunération et les indemnités
des membres du personnel,
(i.1) la rémunération et les indemnités
des administrateurs,
(i.2) les frais afférents aux
élections tenues sous le régime des articles 3.06 à 3.08,
(ii) les frais normaux de déplacement,
de séjour et autres, engagés par ces personnes dans l’accomplissement des
fonctions que leur confère la présente loi,
Comptes distincts
36. La Commission tient des comptes distincts de ses opérations sur le
blé produit dans la région désignée et qui lui est vendu et livré par des
producteurs pour chaque période de mise en commun.
|
Email this Content