Canadian Wheat Board’s District #2's Elected Director
Jim Chatenay’s Message To The Honorable Ralph Goodale

October 21, 2002

The Honorable Ralph Goodale
Minister in Charge of the Canadian Wheat Board

Dear Minister Goodale:

I am writing to you in my capacity as an elected Canadian Wheat Board Director on behalf of myself, and  the majority of Constituents in CWB District #2, and other farmers inside the Designated Area who have also asked me to represent their views.

I initially brought my concerns to my fellow Board members, as required by the Board of Directors Code of Conduct which states, The views and concerns of Western Canadian wheat and barley farmers are an important element in Board decision making and each director has a responsibility to ensure those views and concerns are brought forward to the entire Board.

Simply put, the general feeling is that policy does not reflect CWB legislative requirements. The Code of Conduct states, Duties for corporate directors emanate from common law obligations and the provisions of the statute or instrument under which the company is incorporated, and as required, being pro-active in the performance of my duties by being vigilant to ensure CWB is being properly managed and is complying with laws affecting the CWB

Not only the Code of Conduct requires a duty of care. As well, Parliament requires that Directors have a duty of care to the Corporation under 3.12(2) of the CWB Act which reads: I the directors and officers of the corporation shall comply with this Act, the regulations, the by laws of the Corporation and any directions given to the Corporation under this Act.

Therefore, I am fulfilling my responsibilities by informing the Minister in Charge of the Canadian Wheat Board, that the policies that are enforced by the CWB in our collective opinion, do not reflect the legislative requirements of the CWB Act itself.

Evidence shows that the Board is contravening the CWB Act, and farmers and farm organizations have insisted that I make known the facts that CWB policy disregards the legislative requirements in the Act in the following two areas:

1. The CWB  arbitrarily denies export licenses to all Designated Area farmers. Board policy requires that an export license will only be made available to farmers if the buyback is done. Producers claim 46(d) and 14(b) is not a buyback as described by the CWB and is therefore not a legislative requirement to getting a license.

2. Board Policy allows taking money out of the pooling accounts to pay for licensing costs even though the Act states these costs must be borne by the Federal Government. These alleged breaches were formally submitted in a letter to the Board Chair on April 9, 2002 in accordance with the protocol required by the Code of Conduct under Reporting on Alleged Breach, and at the same time, also provided each of my fellow Directors with an individual copy.

Unfortunately, my Board of Directors will not answer the questions in written form as I requested, and thus I am unable to satisfy my constituents since the Board insists they will only address the questions orally. Wheat Board policy reflecting the discriminatory licensing practices and the mandatory buyback requirement both remain in effect, unaddressed, and the licensing expense deductions from the pooling accounts continues in spite of the requirements by the Act.

My consultations with the Board Chair, the Governance and Management Resources Committee (GMRC), and with individual Board members have lacked remedy because they have not provided me with the documented answers that farmers have every right to ask for as well as deserve to get. In July, 2002, an additional 21 Questions were composed by farmers in District  #2, but they too remain unanswered. Meanwhile, farmers are becoming more adamant in insisting that the Act does not support targeted arbitrary licensing denials. They insist the Act does not allow licensing costs to be paid out of the pooling accounts. They insist the buyback is not required by parliament. These are complex legal issues and the Board of Directors has an obligation to address them, but they have refused, and for this reason, the only appropriate action I could take to reflect the nature, the magnitude and the seriousness of the alleged breeches was to appeal to the Minister of the Canadian Wheat Board for counsel and remedy. I am asking that you read the questions that were submitted to the Board of Directors on April 9, 2002, and I would appreciate if you will answer them, or instruct the CWB to answer them, in written form, so that I can distribute them

The answers are gravely important, and it is for this reason that I am sending a copy of this letter to the Leader of the Opposition, as well as to Mr. Ron Duffy, a farmer who has volunteered to act as a contact for  District #2 and other farmers. By doing this, I hope to remain  open and transparent in this process and am able to fulfill my elected obligation to farmers. I would appreciate if you would see to it that these questions are addressed in a timely fashion,  so that  when producers vote in the upcoming Wheat Board elections, they are able to make the most informed decisions possible.

Yours very truly,
Jim Chatenay
Phone (403) 886-4632       
Fax (403) 886-4622

Attachment:

Copy of April 9, 2002
Letter to the Board of Directors
Mr. Ron Duffy
cc Leader of the Opposition
From:  James Chatenay CWB Director District #2

Date : 9 April, 2002

As an elected Director of the CWB, I feel that it is incumbent upon me to formally advise the CWB Directors and Management of the grave concerns I have regarding the Board of Directors responsibility,  firstly, in seeing that the CWB Act is complied with, and secondly in seeing that CWB communication to producers corresponds with the CWB Code of Conduct.

Parliament requires that Directors have a duty of care to the Corporation under 3.12(2) which reads: the directors and officers of the corporation shall comply with this Act, the regulations, the by-laws of the Corporation and any directions given to the Corporation under this Act. Producers and producer organizations claim that the Board is not following the Act and time and time again, they have have accused the Board of not following its own legislation in these two areas: The CWB denies export licenses unless the buyback is done.  Producers claim 46(d) and 14(b) is not the buyback and is therefore not a legislative requirement. 2) the Board is taking money out of the pooling accounts to pay for licensing costs even though the Act states this cannot be done.  There could be serious consequences for the CWB if the CWB is in contravention of the Act, particularly if there are financial claims that result from being in contravention of the Act.    We must all understand that there are two parts to the Canadian Wheat Board Act. The Licensing Part of the Act applies to all of Canada and is in Part IV of the Act. The Marketing part of the Act which applies only the Prairie provinces is in Part III of the Act.

The CWB requires Western farmers to do the buy„backs and the CWB also tells Western farmers that the buyback is legally described in 46(d) and 14(b) in the Licensing Part IV of the Act. The CWB says the buyback is the difference between the initial price and  the market price and makes the farmer pay that amount. But Section 14 is in the Licensing Part IV of the Act, and applies to all of Canada. This being the case, the Act is only being applied in one part of Canada (the West), to only one group of producers (Western).  Something is wrong here.  Producer groups claim 46(d) and 14(b) are not the buyback, and they have provided some very strong evidence that have caused me to have some very serious doubts about whether the Board is following the CWB Act as written by Parliament.  Should I tell Prairie producers that we are ignoring what Parliament directs us to do? Quebec, Ontario, the feed mills and the seed growers are also under Part IV and they don’t do the buyback.  It then follows that if the Board asks for the difference between the market price and the current initial price from western producers, it should then be a requirement for all exporters. We know these special groups all keep ownership of their grain while Western producers are denied licenses and give up ownership of their grain when they do the buyback..  When producers ask me, How can these privileged groups skip the buyback if 46(d) and 14(b) is honestly the buyback under Part IV and applies to everyone? what shall I tell them?  If 46(d) and 14(b) is honestly the buyback, the CWB should be making sure that all exporters do the buyback. If 46(d) and 14(b) is not the buyback, why has the CWB been saying it is? If 46(d) and 14(b) are the buyback, please explain how Directors can answer the following producer questions: 

1. Why are the buybacks contained in the Licensing Part IV of the Canadian Wheat Board Act which must apply equally to all Canadians, instead of being put in Part III which is the Designated Area Pooling section of the CWB Act?

2. Parliament’s intention was that  buybacks were a tariff, so how can the CWB on its own, now call the tariff a buyback? 

3. How can an interprovincial licensing regulation stating no fee shall be charged be triggered when it openly contradicts the Board’s buyback requiring that a fee must be charged? 

4. How could buybacks apply to imports as well as exports

5. Does the CWB Act allow the Board to take money from producers pooling accounts in Part III to pay for licensing costs in Part IV?

6. Who is legally responsible for paying for the licensing, inspections, data processing and contract renewing that becomes a loss under Part IV of the Act for all the Millions of bushels of wheat and barley have passed through the Export Manufactured Feed Agreement I would like these questions answered by the Board of Directors in written form, so that I can pass them on to producers.

Under the Code of Ethics, I am committed to the Part II called Principles which states: The CWB is committed to engaging in relationships with western Canadian wheat and barley farmers.... which provides service to western Canadian wheat and barley farmer... that is courteous, professional, equitable, efficient, and effective.

1. If the Act is not being followed, whereby a producer is obligated to do a buyback that is not legally required the CWB is neither acting professionally nor equitably.
2. Producers complain that correct information has not been given to them.  
3. Our last producer survey results presented by Mr. David Hurley indicated that 30% of the farmers don’t want the Board at all, 30% of the younger farmers want choice, 30% of the older farmers support the monopoly  and 10% are undecided.  Mr. Hurley also recommended that the CWB should get right out of marketing barley.  Recommendations like this seemed to be ignored.  When are we going to start to listen to producers?  
4. I have a good relationship with producers in my District #2 and that is reflected by the margin of vote I received in the last CWB election.  I am also contacted by many of the 30% of the producers who simply do not support the CWB, and I have a duty to reflect their views.  Additionally, many of the producers who partially support the CWB contact me, even though are not in my district. The majority of producers who contact me indicate they want significant changes to the Board.  I am obligated to reflect the wishes and concerns of all of these producers because that is what I was elected to do.  
5. Although I acknowledge that many of my fellow directors believe in the principle of single desk selling, the CWB Act itself does not state that the CWB Directors and Management should reflect that particular personal political point of view, (or your religious views for that matter).  On the other hand, the concerns that I am bringing forward are ones that Directors are mandated to address, although coincidentally, they also reflect my own personal views of following the Act and treating farmers courteously and professionally and equitably. 

I have been repeatedly reprimanded by the CWB for being seen as one who has not followed policies adopted by the Board, but I raise this question to you, what if the policies you have formulated are not within the boundaries of the Act?  I have a duty to raise producer driven concerns because I feel that to ignore them could place the Board in jeopardy.  I have been accused of undermining the CWB, but the issues I bring forward for farmers cannot be swept under the table, because the number of farmers raising them keeps growing.   If we avoid our legal responsibility of seeing that the Act is followed, it could impact upon the entire Board of Directors. 

I respectfully ask that you reflect upon the concerns that I have brought forward on behalf of the farmers who elected me and who trust in me, and that they will be duly recorded.

Very sincerely yours,
James Chatenay