Vol. 145, No. 23 — November 9, 2011
SOR/2011-227 October 18, 2011
CANADIAN WHEAT BOARD ACT
Canadian Wheat Board Direction Order
P.C. 2011-1182 October 18, 2011
His Excellency the Governor General in Council, on the recommendation of the Minister of Agriculture and Agri-Food, pursuant to subsection 18(1) (see footnote a) of the Canadian Wheat Board Act (see footnote b), hereby directs The Canadian Wheat Board to conduct its operations under that Act, while the Bill entitled Marketing Freedom for Grain Farmers Act is being considered by Parliament, in the following manner:
- (a) it shall avoid extraordinary actions or commitments that would be contrary to the best interests of The Canadian Wheat Board if that Bill is passed by Parliament and receives royal assent; and
- (b) it shall credit profits or gains referred to in sections 8 (see footnote c), 33.01 (see footnote d) and 39.1 (see footnote e) of the Canadian Wheat Board Act (see footnote f) to the contingency fund established under paragraph 6(1)(c.3) (see footnote g) of that Act, unless a different disposition of those profits or gains is required under that Act.
REGULATORY IMPACT ANALYSIS STATEMENT
(This statement is not part of the Order.)
Issue and objectives
The Canadian Wheat Board Act (the CWB Act) provides for the constitution and powers of the Canadian Wheat Board (CWB). The CWB is a shared-governance corporation with the object of marketing in an orderly manner, in interprovincial and export trade, grain grown in western Canada.
The Government’s bill entitled “Marketing Freedom for Grain Farmers Act” (hereafter “the Bill”) was posted on the Notice Paper October 13 and could be introduced as early as the week of October 17, 2011.
The Bill, after receiving First Reading, will release to the public and the CWB the Government’s intentions regarding marketing freedom and the governance of the CWB if the Bill is enacted by Parliament.
In order to ensure the possibility of effective implementation, the regulations will prevent the CWB from taking any actions which may undermine Parliament’s ability to consider the Bill. Examples of such actions would include entering into longer-term contractual commitments which would be harmful to the CWB if the Bill is enacted, or allocating discretionary earnings in a manner unfavourable to the Canadian Wheat Board.
Description and rationale
This regulatory action will issue a Direction Order to instruct the Board of Directors not to engage in extraordinary actions or commitments, or credit discretionary profits in a manner which would be against the best interests of the CWB if the Bill is enacted.
It is essential that the Board of Directors be dissuaded from undermining possible implementation or diverting funds that would normally go to the contingency fund.
In order to be most effective, a Direction Order will need to be in place before the Bill receives First Reading.
The Direction Order will not impact other areas and sectors and is not expected to create any costs for the Government of Canada.
Implementation, enforcement and service standards
The Direction Order will be under subsection 18(1) of the Act.
Subsection 18(1.2) of the Act specifies that “Compliance by the Corporation with directions is deemed to be in the best interests of the Corporation.” As the Corporation is required to act in the best interests of the Corporation, Governor in Council direction orders are deemed by this section to be in the best interests of the Corporation, to remove any doubt or perceived conflict.
Subsection 3.12(2) of the Act also specifies that “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.” This section extends a direction order to the Corporation to be binding on the directors as well.
Paragraph 68(2)(c) makes it an offence to contravene an order. In appropriate cases, the Government could seek injunctions against violations of an order. Directors who violate orders could also be liable in damages for breach of their fiduciary duty towards the CWB, since the Act deems compliance with orders to be in the best interests of the CWB.
Given the nature of the Order and the requirement that it not be released to the public domain in advance of coming into force, no external consultations were done. However, there have been extensive consultations with Treasury Board Secretariat and Privy Council Office.
Senior Policy Advisor
Crop Sector Policy
Strategic Policy Branch
Agriculture and Agri-Food Canada
1341 Baseline Road
S.C. 1998, c. 17, s. 28
R.S., c. C-24
S.C. 1998, c. 17, s. 28
S.C. 1998, c. 17, s. 20
S.C. 1998, c. 17, s. 22
R.S., c. C-24
S.C. 1998, c. 17, s. 6(2)