The Federal Court of Appeal held that there was nothing in the Canadian Wheat Board Act which suggested that the federal government fettered the authority of the Minister of Agriculture to introduce and recommend legislation to repeal the substantive provisions of the CWBA or the Marketing Freedom for Grain Farmers Act itself.

[2012] F.C.J. No. 706

2012 FCA 183

Federal Court of Appeal

Sharlow, Trudel and Mainville JJ.A.

June 18, 2012

The Canadian Wheat Board (CWB) was established by the federal government in 1935. It was required to buy all wheat and barley produced in Western Canada and to market it on behalf of farmers on the international markets. Subject to limited exceptions, the CWBA prohibited any other person from buying, selling, exporting or transporting wheat or barley between provinces. With respect to altering the CWB’s authority, s. 47.1 of the CWBA provided that the Minister of Agriculture was required to engage in a consultative process with the CWB and to gain the consent of producers to fundamental changes to the established grain marketing process.

Shortly after the last federal general election held on May 2, 2011, the Minister publically announced that the re-elected government would move ahead swiftly to allow western grain producers sell and market their grain freely. Many people opposed the planned legislation and the proponents of the CWB quickly focused on the issue of consultation and consent pursuant to s.47.1 of the CWBA. They argued the Minister could not submit the proposed legislation without the prior consent of grain producers obtained through the vote. The Minister held he was not legally bound to hold such a vote and that he would not subject the contemplated legislation to such a plebiscite. Nevertheless, a producer vote was organized. The majority of votes opted to maintain the CBA. The Minister declined to recognize the plebiscite as binding. On October 18, 2011, the Minister introduced into Parliament Bill C-18 which resulted in the eventual adoption of the Marketing Freedom for Grain Farmers Act (the “Act”). The Act replaced the centralized marketing system of the CWB with an open market for grain farmers to sell their product. Implementation of an open market would occur by 2017 under a three phase process.

The fundamental issue raised in this appeal was whether the Minister was legally bound by s. 47.1 of the CWBA to consult with the CWB and to obtain the favourable consent of wheat and barley grain producers through a vote prior to introduction of Bill C-18. The Federal Court found that the Minister failed to comply with his statutory duty pursuant to s.47.1 contrary to the rule of law. The Minister and the federal Attorney General appealed the decision and the appeal was allowed.

The Federal Court of Appeal rejected all of the arguments advanced by the respondents or the interveners that suggested the Minister was precluded from introducing into Parliament legislation which fundamentally modified the CWB’s mandate or led to the repeal of CWBA. After reviewing the legislative history of s. 47.1 of the CWBA, the Federal Court of Appeal held that there is nothing in s. 47.1 or the legislative history which suggest that Parliament fettered the Minister’s authority to introduce and recommend to Parliament legislation to repeal the substantive provisions of the CWBA or the Act itself. Phrased differently, the Appeal Court found nothing in the evidence which led to the conclusion that the repeal of the CWBA was somehow made conditional to obtaining the prior consent of the CWB or of grain producers. Further the Appeal Court held that the democratic principle, concerning marketing, favours an interpretation of s. 47.1 of the CWBA that preserves to the greatest extent possible the ability of the elected members of the House of Commons, including the Minister, to change legislation as best they see fit. The Appeal Court did not find that the changes proposed in the Act, which would allow an open and free market for grain producers by putting an end to the CWB marketing monopoly, would run afoul of NAFTA or any other of Canada’s international trade agreements. Lastly, the Appeal Court held that the Charter did not extend any constitutional protection (specifically referencing the freedom of association right per paragraph 2(d) of the Charter) to a marketing monopoly or to a compulsory price pooling system as contemplated by the CWBA and that the Act did not restrict the ability of grain producers to associate for the purposes of marketing or pooling their products.