CWB Sues Ottawa Over Arason

WINNIPEG - Jan 31/07 - SNS -- Acrimony between Canada's federal agriculture minister and the Canadian Wheat Board (CWB) reached a new level with the marketing board's decision to sue the government over the salary level set for interim CEO Greg Arason.

Terms of his employment were negotiated with the federal agriculture minister, who issued a January 26 Direction Order commanding the CWB to pay interim CEO Greg Arason in accordance with a letter of appointment negotiated between Arason and Minister Chuck Strahl.

The court will be asked to confirm that the CWB board of directors, not the federal government, has the authority to establish the compensation of the President and CEO. Further, the CWB will seek a decision from the court that the government's use of the Direction Order was invalid and beyond its authority. It is the CWB's view that, under The Canadian Wheat Board Act, only the board of directors can set remuneration for a CEO.

In a board meeting held by teleconference this morning, the board of directors also agreed, under protest, to comply with the terms and provisions of the Direction Order for the period of the Ministerial appointment. This means that Arason will be paid according to the terms of his appointment letter for a period of 90 days, covering December 19, 2006 through March 19, 2007.

At the end of 90 days, Arason's term can only be extended by a federal Order-in-Council. It is the CWB's view that the Act then requires that the board be consulted with regard to the extension and that the board fix remuneration.

The January 26, 2007 Direction Order is the second that the CWB has received from the federal government. The first was issued on October 6, 2006 and directs the CWB to refrain from spending funds to advocate retention of monopoly powers.