Radio Interview on July 13, 2015
CBC Manitoba Radio Noon
Janet Stewart interviews Anders Bruun
Announcer Janet Stewart: Introduction
$720 million dollars is how much some Western Canadian farmers say they were short changed by the Government when the Canadian Wheat Board was dismantled. Four western Canadian farmers served a Class Action Statement of Claim on Friday in Ottawa. Anders Bruun is the Winnipeg lawyer representing the Friends of the Canadian Wheat Board who are behind this Class Action. Good Afternoon.
Question: How did you arrive at the $720 million dollar figure?
Anders Bruun: The $720 million dollar figure that is being claimed was arrived at by looking at the expenses of the Canadian Wheat Board under the farmer elected board of directors since 1998 and then comparing those expenses relative to gross income for the final year of the Wheat Board which was 2011/2012. For 2011/2012 the expenses were 17% and 83% was paid out to farmers. In the previous 14 or so years, the expenses were 7% of the gross revenue and 93% had been paid out to farmers so we see more than a doubling of the expenses charged to the pooled accounts in that final crop year which was managed mostly by the government appointed directors.
Question: Why do you think the expenses went up so dramatically?
Anders Bruun: Well we are not sure but we see signs of money being set aside as a seed money fund for the new Canadian Wheat Board in various ways when we look at the Annual Report which was issued for that final crop year. We see for example that 3 million tons of inventory was written down by about $22 million dollars which is something that is entirely appropriate moving from a high price year into a lower price year. But in fact going from 2011 to 2012 we are moving from a year which wheat prices were approximately $6.00 a bushel and they arose over the 3 months before and then the three months after the end of the crop year up to about $8.50 a bushel so if your transferring inventory from that earlier crop year and that inventory has gone up in value you expect there to be a positive adjustment with money being added to the pool account for 2011/2012. And instead you saw a negative amount. We saw a negative amount of over $20 million dollars.
Question: Now it sounds like you have to do a bit of hunting or investigative work to figure out what happened to the money. Why is that? Can’t you just look at the financial records for 2011/2012?
Anders Bruun: The financial records for 2011 and 2012 are available to us and they do show a number of allocations of money to things like the pension liability the wheat board would have had for laying off so many of its employees at that time, severance packages.
Question: Is that proper do you think?
Anders Bruun: That sort of thing can be proper as long as its properly funded by some source of money that is not out of the farmers pocket. The Government did indicate that it would provide some money to cover transition costs but we don’t see where all of that money has been applied. Only a small portion of it has actually been applied against the expenses that we see on the Wheat Board’s annual report for 2011/2012 and we don’t have the reports for 2012/2013, so we don’t know where the money went.
Question: Why don’t you have those reports?
Anders Bruun: Well the Minister did not file them in Parliament.
Question: Why Not?
Anders Bruun: Well at the time the reason given was at the time they were commercially confidential in view of the upcoming privatization of the Canadian Wheat Board but the Wheat Board has been privatized now and a deal has been announced so we see no reason that those annual reports can’t be released now.
Question: Would you like to see them?
Anders Bruun: Yes we would and in fact my clients are calling for review by the Auditor General of the Wheat Boards operations in relation to the handling of the 2011/2012 crop year monies. That is a very substantial sum there and it may be appropriate as the tax dollars are involved in the privatization as well for the Auditor General to have a look at where tax payers money went in that privatization.
Question: So in a nutshell, you think that $720 million dollars, much of that money might have been spent in the dismantling of the Canadian Wheat Board in all those expenses involved with privatizing things and that is not correct in your mind?
Anders Bruun: Exactly, the Canadian Wheat Board Act is very specific on what has to be paid out to producers. It’s operated in the same way for many decades since world war 2. The board is allowed to borrow money to buy grain from farmers and it receives money when it sells grain to overseas customers and it has certain staffing expenses, operating expenses, bank expenses, interest on money borrowed and so forth. The expenses directly attributable to selling that crop can be deducted from the net proceeds of sale which they typically are and at the end of each crop year the Wheat Board ends up with zero money in its pool accounts because its paid everything to farmers except the actual expense of marketing. So the mechanics of calculating what is deducted and what is not and how it is deducted, how things may have been paid out over a number of years have been well established and we don’t see that they followed that pattern at all in 2011 and 2012.
Question: You served a Class Action Statement of Claim on Friday in Ottawa. Have you had any response from the Government?
Anders Bruun: No we haven’t.
Question: What are you expecting?
Anders Bruun: I’m expecting that they will fight this thing tooth and nail much as they did with the veterans Class Action the veterans brought and just as they have with any other Action that has been brought against them. That means we could be seeing a trip to the Supreme Court once again. This is not a constitutional issue but the Government has not fared well in the constitutional issues when they go to the Supreme Court and I think their style has been one of just a pushing things through and letting matters get sorted out in the Courts after the fact which is an extremely brutal strategy. You know, you dismantle something like the Wheat Board and then you leave people to pick up the pieces the best they are able to after the fact, whether it was done properly, whether the right money was paid to the people who are entitled to it and so forth seem to be secondary questions so yes we expect a really tough fight but.
Question: Are you up for it?
Anders Bruun: Of course. Ya. (laughs) This is what we live for really. You know really to bring something like this to a satisfactory conclusion is something we have done before and something we will do again.
Announcer Janet Stewart: Anders Bruun. Thank you for being with us.
Thank you its been a pleasure.
Announcer Janet Stewart: Anders Bruun is a lawyer who is representing the Friends of the Wheat Board. He came to the studio and spoke with me a few minutes before the show began.