Court overturns Ottawa's gag on Wheat Board

WINNIPEG, Manitoba (Reuters) - A Canadian court has ruled the federal government overstepped its authority by ordering the Canadian Wheat Board to stop spending money defending its monopoly on sales of wheat and barley.

Federal Court Justice Roger Hughes ruled late Thursday that the government also violated the Charter of Rights and Freedoms with what the CWB called a “gag order.”

The farmer-controlled CWB has a government-granted monopoly on sales of wheat and barley from Western Canada to millers, maltsters and export markets, making it one of the world’s largest grain exporters.

The marketing agency, which had C$4.95 billion ($4.85 billion) in revenue last year, is embroiled in a bitter power struggle with the Conservative government, which has promised to end the CWB’s monopoly.

In October 2006, the federal cabinet issued an order directing the CWB to stop spending money promoting its view that the monopoly should be maintained.

But Justice Hughes said there was no evidence that spending money on advocacy was a serious financial concern.

“It is entirely clear, therefore, that the directive is motivated principally to silencing the Wheat Board in respect of any promotion of a ‘single-desk’ policy that it might do,” Hughes wrote in his decision.

Hughes also noted the CWB is not a government-owned corporation, and that the agency’s directors, the majority of whom are elected by farmers, have the duty to safeguard farmers’ interests.

Hughes dismissed a second complaint from the CWB about a government order to pay Greg Arason, appointed interim chief executive after the government fired Adrian Measner, the CWB’s previous CEO.

Hughes said the matter was moot because Arason is no longer CEO, having been replaced by Ian White on March 31.

($1=$1.02 Canadian)

Reporting by Roberta Rampton; editing by Rob Wilson