Bilal Farm Inc. v Ontario Sheep Marketing Agency, 2007 ONAFRAAT 9

Agriculture, Food and Rural Affairs Appeal Tribunal

1 Stone Road West Guelph, (Ontario) N1G 4Y2 Tel: (519) 826-3433, Fax: (519) 826-4232 Email: appeals.tribunal.omafra@ontario.ca

Tribunal d’appel de l’agriculture, de l’alimentation et des affaires rurales 1, chemin Stone Ouest Guelph (Ontario) N1G 4Y2 Tél.: (519) 826-3433, Téléc.: (519) 826-4232 Email: appeals.tribunal.omafra@ontario.ca

APPEAL: Bilal Farm Inc. v Ontario Sheep Marketing Agency Bilal Farm Inc. v Ontario Sheep Marketing Agency 2007 ONAFRAAT 09

STATUTE: Ministry of Agriculture, Food and Rural Affairs Act

HEARING: January 31, 2007

DATE OF DECISION: March 13, 2007

2007-09

NEUTRAL CITATION: 2007 ONAFRAAT 09

IN THE MATTER OF THE FARM PRODUCTS MARKETING ACT AND SECTION 16 OF THE MINISTRY OF AGRICULTURE, FOOD AND RURAL AFFAIRS ACT.

AND IN THE MATTER OF: An Appeal to the Agriculture, Food and Rural Affairs Appeal Tribunal by Bilal Farms Inc., Clarence Creek, Ontario from a decision of the Ontario Sheep Marketing Agency (OSMA) dated September 13, 2006 by which it ordered that:

1. Bilal Farms Inc. pay to OSMA licence fees and finance charges of $9,089.48
2. Bilal Farms Inc. pay to OSMA a fine in the amount of $1,000.00 by September 30, 2006, or in the amount of $10,000.00 if the outstanding licence fees, finance charges and fine is not paid by October 13, 2006
3. The sheep slaughtering licence of Bilal Farms Inc. be suspended in the event of the failure to pay outstanding licence fees, finance charges and fine by October 13, 2006.

Before: Rod Stork, Chair; Corry Martens, Member; John Rudics, Member

Appearances: Wakil Zazay, Plant Manager, Bilal Farms Inc., appellant Paul Trudell, counsel, Ontario Sheep Marketing Agency, respondent Robert Connelly, witness for the respondent

DECISION OF THE TRIBUNAL

This appeal was heard in Blacks Corners, Ontario on January 31, 2007. Mr. Wakil Zazay, (on behalf of Bilal Farms Inc.) appealed to the Agriculture, Food and Rural Affairs Appeal Tribunal (the Tribunal) from the decisions of the Ontario Sheep Marketing Agency (OSMA) to collect payment of outstanding licence fees and finance charges from Bilal Farms Inc. in the amount of $9,089.48 and to fine Bilal Farms Inc. $1,000.00 if the outstanding fees and finance charges were not paid by September 30, 2006 or a further fine of $10,000.00 and the loss of licence to slaughter sheep if the outstanding fees, finance charges and $10,000.00 fine remained unpaid by October 13, 2006.

Statutory Context

Subsection 16(2) of the Ministry of Agriculture, Food and Rural Affairs Act states that:

(2) Subject to subsections (4) and (5), if a person is aggrieved by an order, direction, policy, decision or regulation made under the Farm Products Marketing Act by a local board or under the Milk Act by a marketing board, that person may appeal to the Tribunal by filing with the Tribunal and sending to the local board or marketing board written notice of the appeal. R.S.O. 1990, c. M.16, s. 16 (2); 2006, c. 19, Sched. A, s. 16 (3).

The Farm Products Marketing Act, Regulation 429, Section 6 states that:

6. The Commission delegates to the local board its powers to make regulations with respect to sheep and wool,

(a) providing for the licensing of any or all persons before commencing or continuing to engage in the producing, marketing or processing of sheep or wool;

(a.1) prescribing or providing for classes of licences and the imposition of terms and conditions on any class of licence;

(a.2) providing that the local board may impose terms and conditions upon a licence or any class of licence;

(b) prohibiting persons from engaging in the producing, marketing or processing of sheep or wool except under the authority of a licence and in compliance with the terms and conditions of the licence;

(c) providing for the suspension or revocation of a licence or for the refusal to grant or renew a licence,

(i) if the applicant or licensee is not qualified by experience, financial responsibility or equipment to properly engage in the business for which the application was made or the licence granted,

(ii) if the applicant or licensee has failed to comply with or has contravened any provision of the Act, the regulations, the plan or any order or direction of the Commission or local board;

(d) providing for the imposition, amount, disposition and use of penalties if, after a hearing, the local board is of the opinion that the applicant or licensee has failed to comply with or has contravened any term or condition of a licence or any provision of the Act, the regulations, the plan or any order or direction of the local board;

(e) providing for the fixing of licence fees and the payment thereof by any or all persons producing or marketing sheep or wool and the collecting of the licence fees and their recovery by suit in a court of competent jurisdiction;

(f) requiring any person who receives sheep or wool to deduct from the money payable for the sheep or wool any licence fees payable to the local board by the person from whom the sheep or wool are received and to forward such licence fees to the local board;

(g) requiring any person who produces and processes sheep or wool to furnish to the local board statements of the amounts of sheep or wool produced in any year and used for processing;

(h) prescribing the form of licences;

(i) providing for the exemption from any or all of the regulations, orders or directions under the plan of any class, variety, grade or size of sheep or wool, or any person or class of persons engaged in the producing or marketing of sheep or wool or any class, variety, grade or size of sheep or wool;

(j) requiring the furnishing of security or proof of financial responsibility by any person engaged in the marketing of sheep or wool and providing for the administration and disposition of any money or securities so furnished;

(k) providing for the control and regulation of the marketing of sheep and wool, including the times and places at which sheep and wool may be marketed;

(l) providing for the control and regulation of agreements entered into by producers of sheep or wool with persons engaged in marketing or processing sheep or wool and the prohibition of any provision or clause in such agreements;

(m) requiring any person who produces sheep or wool to offer to sell and to sell the sheep or wool through the local board;

(n) prohibiting any person from processing, packing or packaging any sheep or wool that has not been sold by or through the local board;

(o) providing for the making of agreements relating to the marketing of sheep or wool by or through the local board, and prescribing the forms and the terms and conditions of such agreements; and

(p) providing for the making of such orders and the issuing of such directions as are necessary to enforce the due observance and carrying out of the Act, the regulations, the plan or any order or direction of the Commission or the local board. R.R.O. 1990, Reg. 429, s. 6; O. Reg. 256/94, s. 1.

Preliminary Matter

Mr. Paul Trudell, counsel to OSMA told the Tribunal that he had discussions with Mr. Zazay before the commencement of the hearing. He stated that Mr. Zazay did not dispute that the total amount of licence fees and finance charges outstanding, as of December 31, 2006 was $11,686.30. Mr. Trudell submitted that in addition to agreeing to the total outstanding, Mr. Zazay had no dispute with respect to the number of sheep slaughtered for which licence fees had not been paid. He told the Tribunal that OSMA had intended to call Mr. Louis Martel as a witness to speak to the issue of sheep slaughtered, however as this was not in dispute there was no need to hear evidence on the matter from Mr. Martel.

Mr. Trudell told the Tribunal that Mr. Zazay had indicated that he was comfortable with the exercise of OSMA’s authority as provided for under the Farm Products Marketing Act and its Regulations with respect to collecting licence fees from processors such as Bilal Farms Inc. and to require that the record of sheep slaughtered for which fees were remittable to OSMA, be provided on a specified form. He stated that Mr. Zazay had indicated his agreement that the aforementioned legislation empowered OSMA to hold hearings, and to impose penalties on processors who did not comply with the requirement to remit licence fees as set out in legislation and, as provided for in OSMA’s Regulation 1. He stated that the same matters that Mr. Zazay confirmed were not in dispute were those issues to which Mr. Wakil Zazay and Mr. Hakim Zazay pled guilty as stated in the OSMA Board’s September 15, 2006 decision.

Mr. Zazay told the Tribunal that the data for numbers of sheep slaughtered was recorded by the Ontario Ministry of Agriculture, Food and Rural Affairs (OMAFRA) and that he trusted the OMAFRA record was correct. He stated that although he understood the legislation that empowered OSMA, he disagreed with OSMA’s interpretation of the legislation.

The Issue

Was the collection of outstanding licence fees, finance charges, imposition of a fine of $1,000.00 for non payment by September 30, 2006 and a further penalty of $10,000.00 and licence suspension if the outstanding fees, finance charges and fine were not paid by October 13, 2006 fair and appropriate?

The Evidence

Wakil Zazay

Mr. Zazay expressed his gratitude for the opportunity to present his case before the Tribunal. He stated that he holds a degree in Economics from Carleton Univeristy. Mr. Zazay told the Tribunal that although English is not his first language, he has assisted in numerous court proceedings by acting as translator as he speaks six languages. He stated that due to his experience at court, he understood the process by which hearings are held. Mr. Zazay submitted to the Tribunal that:

• He and his brother started Bilal Farms Inc. in 1998.
• They have an excellent relationship with suppliers however, the collection of fees from custom kill clients will damage their relationship with customers. He can order up to $150,000.00 worth of sheep from a Manitoba supplier without immediate payment because Bilal Farms Inc. has such an excellent reputation with its suppliers.
• In December 2000 he met with Mr. Robert Connelly of OSMA to discuss his concerns with collecting licence fees from customers.
• In 2000 there were eight abattoirs competing for business in the Ottawa area. Rather than risk losing the patronage of custom kill clients to other abattoirs, he had paid the licence fees from his own pocket. At that time the price of sheep was low and hides were sold to a company that removed them from the abattoir premises.
• From 2000 to 2005 business expenses increased and it became necessary to pay for the removal of hides.
• He paid the required licence fees, though sometimes payment was past due.
• He stopped paying licence fees to OSMA in April 2005, however, he did not resort to recording revenue for his custom kill operation in such a manner as to cheat OSMA of licence fees. To do so was unethical and he prides himself on conducting his business affairs fairly and ethically.
• In 2005 he explained to Mr. Connelly that it was very difficult to collect the fees from custom kill clients. He asked Mr. Connelly how he was expected to collect fees from clients if doing so would mean that they took their business elsewhere.
• He told Mr. Connelly that the auction houses were in a much better position to collect fees because the seller of livestock had to pay the fee or face not being able to market his/her animals.
• Mr. Connelly failed to assist him in 2000 which led to the necessity of the present hearing before the Tribunal.
• Mr. Louis Martel is familiar with his business premises, and could attest to its excellent condition. The facility was in very poor condition when it was first purchased, however, it was transformed into an excellent plant within a short period of time. The plant is now rated AA.
• He did not dispute the amount of outstanding fees as of September 2006, however, he had asked OSMA to compel the custom kill clients to pay the fees. He was not permitted to finish his presentation before OSMA at the September 2006 hearing, and strongly objected to the portrayal of Bilal Farms Inc. as criminal in OSMA’s November-December issue of its trade magazine.
• The abattoir business is very difficult to operate and he works very hard.
• OSMA has the ability to collect fees where he cannot. The auction market operators also have the power to compel the payment of fees.
• He loses money when stores close down without paying him for services rendered.

In response to questions, Mr. Zazay stated:

• Bilal Farms Inc. is currently licensed to slaughter sheep.
• He understands the Processor Requirements provided for in Section 4 (2) (d) of OSMA Regulation 1 with respect to his obligation to collect licence fees and to remit the fees to OSMA.
• He has not collected the licence fees.
• The non payment of fees is not indicative of an unwillingness to pay, rather, he cannot pay the fees.
• He is asking that OSMA instruct the auction houses to collect the required licence fees and remit them to OSMA.
• If he tries to collect the fees from his customers they will take their business elsewhere.
• Abattoirs that are collecting fees and remitting them to OSMA are most likely paying the fee from their own pockets or making arrangements to circumvent the system, however, he has no specific knowledge of any abattoir conducting business in such a fashion.
• He has not remitted any licence fees to OSMA.
• Abattoirs are exempt from collecting the licence fee and remitting it to OSMA for any sheep that is purchased by the abattoir for slaughter. Unscrupulous abattoir operators might purchase sheep in their name for custom slaughter, thereby circumventing the system.
• He requests that OSMA change its policy with respect to the collection and remittance of licence fees.
• The cost of operating an abattoir is rising with fees for rendering and offal removal increasing. In the town where Bilal Farms Inc. is located, it is difficult to find employees who are willing to work on the kill floor.
• Customers are not billed for services that are necessary to slaughter, such as offal removal.
• December 30, 31 and January 1, 2 and 3 are holidays for which inspectors are paid overtime to attend at the plant. Customers who were charged for the attendance of the inspector during the holiday were vociferous in their objections.
• He has been aware of his obligations to collect and remit licence fees since he first began operating the plant. His payment of the fees out of pocket until 2005 is proof of his commitment to his obligations.
• If OSMA’s only source of revenue was through the collection of fees by processors, he would continue to collect fees and remit them to OSMA, however, there is an alternative.
• He stopped collecting and remitting the fees because he had spoken to OSMA on 10 occasions with respect to improving the quality of and reducing the price of lamb and the cost for removing hides.
• He cannot pay the fee out of his own pocket, so he is requesting that the requirement for fee collection and remittance be placed on the auction house, not the processor.
• He suggests that the sheep producing and processing industry should more closely resemble the system for marketing chicken; processors may contract with producers to obtain the quality of animal that their customers will purchase.
• OSMA was not able to provide him with the names and addresses of sheep producers whom he could contact directly for the purchase of sheep.
• He has never written to OSMA requesting a change of policy with regard to collection of licence fees nor has he submitted a proposal indicating his preference for the collection of licence fees.

Robert Connelly

Mr. Robert Connelly gave evidence before the Tribunal. He stated that he has been employed as OSMA Liaison Officer since September 1999. Mr. Connelly told the Tribunal that his duties included collecting licence fees from the marketing of sheep in Ontario. Mr. Connelly stated:

• He has been involved with Bilal Farms Inc. since it first began operations.
• During his former career as a Police Officer, he developed the habit of taking notes. His notes (Exhbit A, tab 6) indicate that he had contact with Bilal Farms Inc. on numerous occasions from April 1999 through September 2006.
• OSMA made several attempts to assist Bilal Farms Inc., including waiving fees, when it was indicated that Bilal Farms Inc. was having difficulty making payment.
• In his capacity as Liaison Officer, he cannot develop policy, however he is permitted to make recommendations to the OSMA Board and its General Manager. He must carry out the provisions of existing policy as appropriate.
• On July 27 2005, he first spoke, by way of telephone with Mr. Wakil Zazay about fees that were unpaid since April of 2005. Slaughter report forms were also outstanding. Mr. Zazay explained to him that business pressures and OSMA inaction on behalf of abattoir operators prevented him from making payment.
• He told Mr. Zazay that he should present his issues to the OSMA Board: Mr. Zazay did not do so. He reminded Mr. Zazay that he was obligated to comply with the payment policy and was told that payment was forthcoming, however, no payment was received by OSMA.
• OSMA bills abattoirs for licence fees in the month after the sheep were marketed; most abattoirs make payment within two months of billing. There are 116 abattoirs that are licensed to slaughter sheep in Ontario. OSMA has difficulty in getting payment from four of the 116 abattoirs; Bilal Farms Inc. is one of the four. The accounts of two abattoirs have been referred to a collection agency for collection of $200.00 or less.
• Ninety eight percent of OSMA producers/processors are in compliance with the licence fee payment policy.
• Each compliant processor needs approximately 15 minutes per month of his time to prepare the necessary invoices and bills.
• In the case of Bilal Farms Inc. he has expended approximately 100 hours since July 2005 for billing, invoicing, telephone calls, correspondence and travel to the plant to serve notice of the OSMA hearing.
• Section 4 of OSMA General Regulation 1, provides for the collection of fees and remittance to OSMA by livestock auction markets. The livestock auction market is obliged to collect from the seller, $1.55 for each head of sheep sold. The $1.55 is remitted to OSMA.
• The livestock auction markets are not obliged to collect any monies from the buyers of sheep.
• Mr. Zazay wishes OSMA to delegate his licence fee collection obligation to Leo’s and Embrun Livestock (Ottawa Livestock, Embrun)
• Section 4 (2) of OSMA General Regulation 1 provides for exemption for processors from remitting licence fees for sheep purchased for its own slaughter from the livestock auction market. OSMA made this provision in an effort to assist sheep processors.
• When sheep are purchased for custom kill, processors are required to collect the licence fee from the client who purchased the sheep for custom slaughter and remit the fee to OSMA.
• Some processors arrange to purchase the sheep for custom slaughter clients and therefore avoid collecting and remitting the licence fee.
• Some processors pay the licence fees from their own pocket to avoid charging the customer a higher custom kill fee.
• At the livestock auction market it is usually the end user who bids on and purchases the sheep. Some livestock auction markets will extend credit to abattoir operators for large volume purchases of sheep.
• The buyer deducts the fee of $1.55 per head of sheep from the price he/she pays to the seller. The fee may be collected more than once for any given sheep, depending on how many times the sheep changes hands before slaughter.
• In May 2000, copies of an amended licence and OSMA’s Slaughter Plant Requirements Policy were sent to Bilal Farms Inc..
• He spoke with Mr. Zazay on May 10, 2002 concerning a meeting to discuss an audit of Bilal Farms Inc. licence fee collection practices.
• An audit was conducted on May 21, 2002. Mr. Zazay stated that he was not aware of his obligation to collect licence fees.
• On May 27, 2002 outstanding fees from the period September 2001 through February 2002 were waived.
• Due to the Freedom of Information and Protection of Privacy Act (FIPPA) he was unable to provide Mr. Zazay with the requested names and addresses of producers for the purpose of contracting to purchase sheep. He did however telephone all producers east of Port Perry to inform them that Bilal Farms Inc. was interested in contracting directly with producers to purchase sheep.
• He informed Mr. Zazay that he had contacted the producers, however, he does not know if any producers made arrangements with Mr. Zazay as a result.
• The Ontario Independent Meat Processors is an organization that represents abattoirs, butcher shops and independent meat processing plants. Membership is voluntary.
• The OSMA system cannot model the regulated marketing system for production and slaughter of chicken without changes to regulation and policy, which is a function of the OSMA Board.
• Under the current OSMA system, producers may make business arrangements with any abattoir of their choosing.

Closing Arguments

In summation Mr. Zazay stated that the majority of abattoirs in Ontario are large scale operations with the financial means to address the rising cost of doing business such as paying for the removal of hides and the collection and remittance of licence fees. He stated that the smaller abattoirs should be given consideration with respect to their viability in the industry. Mr. Zazay maintained that he has not been neglectful in failing to collect fees and remit them to OSMA, but that he did not have the authority or ability to insist on collecting the fees from his customers.

Mr. Zazay told the Tribunal that there is no representative within OSMA to serve the interests of small abattoirs. He stated that the majority of lamb consumption in Ontario is in the Muslim community, however, OSMA does little to improve the marketing of lamb to Muslim consumers. He argued that OSMA marketing was directed mainly toward those consumers of European descent.

Mr. Zazay said that he does not dispute that he owes outstanding licence fees, however, OSMA should involve itself in assisting him. Mr. Zazay said that the economy is reliant upon small businesses; he implored the Tribunal to consider the difficulties inherent in operating a small business. He reminded the Tribunal that he is willing to work with OSMA to improve the quality of lamb in Ontario and to assist in bringing about a system where processors could contract directly with sheep producers in Ontario.

Mr. Trudell told the Tribunal that Mr. Zazay raised a new item in his summation. He stated that OSMA wanted to make clear to the Tribunal that Bilal Farms Inc. was not a small abattoir as Mr. Zazay had stated. He said that a total of 116 abattoirs were licensed to slaughter sheep in Ontario and that Bilal Farms Inc. was in the top 12 of 116 abattoirs.

Mr. Trudell referred the Tribunal to the Overview of O.S.M.A. Authority and Procedures. He read from the overview stating that OSMA’s mandate was to improve the sheep industry, increase the quantity of sheep being produced, and to act as the voice of sheep producers in the province of Ontario. He stated that the financial means relied upon by OSMA in fulfilling its mandate came from the licence fees. He emphasized that the organization would certainly decline, if it could not collect the necessary monies to sustain itself.

Mr. Trudell submitted that the cooperation of all industry participants was essential to the existence of the organization. He stated that Bilal Farms Inc. exemplified the delinquency that struck at the heart of the viability of the sheep marketing system. Mr. Trudell explained that OSMA could not ignore Bilal Farms Inc. non compliance because to do so would be to serve notice to industry participants that non compliance was acceptable. He stated that all participants in the system must cooperate.

Mr. Trudell pointed out that Bilal Farms Inc. had willfully withheld payment and that the appellant had freely admitted that he did not wish to collect the fees from his clients or to pay the fees from his own pocket. Mr. Trudell reminded the Tribunal that the appellant had been in arrears repeatedly, despite OSMA’s assistance as demonstrated in the waiving of fees and Mr. Connelly’s work with producers to inform them of a processor willing to secure a supply of lamb. He reminded the Tribunal that Mr. Zazay had never approached the OSMA Board to request or propose a plan to resolve his issues, nor had Mr. Zazay produced any documentary evidence to substantiate his claim that he was willing to work with OSMA to resolve his issues. Mr. Trudell submitted that Mr. Zazay had continued to shirk his obligation, delay and plead difficulty due to being a small business. He told the Tribunal that Bilal Farms Inc. had been in default of payment for years.

Mr. Trudell asked the Tribunal to uphold the regulative authority governing the collection of fees and levy of penalty by OSMA. He reminded the Tribunal that failure to remit fees was the most grievous offence to the marketing system. He referred to Section 15 of the Farm Products Marketing Act which provided the authority for a local board to levy fines to a maximum of $2,000.00 per day for each day that an offence remains uncorrected. He stated that Bilal Farms Inc. had been in contravention of OSMA regulations for 22 months. He requested that the Tribunal uphold the penalty of a $10,000.00 fine and licence suspension for non compliance. He submitted that OSMA was amenable to extending a grace period of 15 to 30 days for the appellant to make the required payments but that it requested that the $10,000.00 fine and licence suspension be imposed if the payment of fees and outstanding finance charges were not met.

Mr. Trudell referred to a decision of the Tribunal dated October 27, 2006 where the Tribunal declined to uphold a fine of $10,000.00, because of the remote probability of successfully collecting the fine. He submitted that OSMA understood that the Tribunal did not base its decisions on precedent, however, OSMA wished to express its strong objection to the Tribunal’s October 27, 2006 decision where a $10,000.00 fine was not upheld.

Mr. Trudell told the Tribunal that costs were incurred by OSMA to prepare and attend at the hearing and in its efforts to collect the fees over a two year period. Mr. Trudell requested that the Tribunal uphold the penalty

Mr. Zazay replied to Mr. Trudell’s closing arguments. He stated that he was willing to cooperate with OSMA and that the present circumstances were financially burdensome. He emphasized the difficulty in collecting the required fees from his clients. He stated that although Bilal Farms Inc. was within the top 12 of 116 licensed sheep abattoirs in Ontario, there was marked difference in size between the largest abattoir and Bilal Farms Inc..

The Findings

The Tribunal heard evidence that OSMA had made arrangements on two previous occasions to assist the appellant when payment of licence fees to OSMA were in arrears. In May 2002 outstanding licence fees were waived for a five month period, and Mr. Connelly responded to Mr. Zazay’s request for producer information insofar as the provisions of the FOIPPA permitted. Mr. Connelly also informed Mr. Zazay that the OSMA Board was the appropriate forum to present his issues. There is no evidence to indicate that Mr. Zazay was discouraged from bringing his issues to the OSMA Board. It is Mr. Zazay’s evidence that he did not make his issues or any request for policy change known to the OSMA Board. Mr. Connelly’s evidence was that he discussed the necessity of collecting and remitting fees with Mr. Zazay in the course of arranging an audit of the plant’s slaughter records and that the document Slaughter Plant Requirements was sent to Mr. Zazay in May 2000. No evidence was presented to indicate that the document was not received or that the requirements described therein were not understood by Mr. Zazay.

The Tribunal finds that there were several attempts to assist Bilal Farms Inc. in meeting its obligations with respect to remitting licence fees notwithstanding that OSMA’s mandate provides for the improvement of sheep quality, expansion of markets and promotion of producer interests. The penalties and finance charges have been levied against Bilal Farms Inc. for fees that have been outstanding for almost two years.

It has been sufficiently demonstrated that Mr. Zazay understood his obligations under OSMA regulations through his admissions that, he paid fees out of his own pocket until 2005 and that he does not dispute the amount of fees outstanding based on the records of OMAFRA. Mr. Zazay’s evidence was that he cannot collect fees from his clients, but that he is willing to pay OSMA. The Tribunal feels that Mr. Zazay’s evidence with regard to his willingness to pay and the difficulty in collecting fees from his clients do not in any way mitigate his obligations which were clearly known to him under the provisions of OSMA Regulation Number 1, and the Slaughter Plant Requirements document.

The Tribunal accepts that OSMA is supported by monies generated by licence fees from the marketing of sheep in Ontario. The authority for it to collect the fees, and to levy penalties against industry participants who contravene its regulations are lawful under the Farm Products Marketing Act and its Regulation 429. The Tribunal recognizes that the viability of OSMA is distinctly threatened if the fees upon which it relies are not collected. Bilal Farms Inc. has disregarded its obligation to remit licence fees for almost two years. The Tribunal finds that the fine of $1000.00 and further fine of $10,000.00 and suspension of licence to slaughter sheep is fair and appropriate. The appellant has contravened the provisions of licensing under the OSMA marketing system. In doing so it has undermined the foundation of the marketing system which exists so long as OSMA continues to exist and so long as there is cooperation among all industry participants.

Decision and Reasons

After careful consideration of the evidence filed and the submissions made the Tribunal orders:

1. That the outstanding fees and finance charges, fine, further penalty and suspension of licence to slaughter sheep is upheld.
2. Bilal Farms Inc. is ordered to pay to OSMA licence fees and finance charges of $9,089.48
3. Bilal Farms Inc. is ordered to pay to OSMA a fine in the amount of $1,000.00 if the outstanding licence fees, and finance charges are not paid within 15 days from the release of this decision of the Tribunal or in the amount of $10,000.00 if the outstanding licence fees, finance charges and $1,000.00 fine remain unpaid for more than 30 days from the release of this decision.
4. The sheep slaughtering licence of Bilal Farms Inc. is to be suspended in the event of failure to pay outstanding licence fee, finance charges and fines any later than 30 days from the release of this decision.

Dated at Guelph, Ontario this 13th day of March, 2007.