Agriculture, Food and Rural Affairs Appeal Tribunal 1 Stone Road West
Tribunal d’appel de l’agriculture, de l’alimentation et des affaires rurales 1, chemin Stone Ouest
Guelph, (Ontario) N1G 4Y2 Tel: (519) 826-3433, Fax: (519) 826-4232 Email: appeals.tribunal.omafra@ontario.ca
Guelph (Ontario) N1G 4Y2 Tél.: (519) 826-3433, Téléc.: (519) 826-4232 Email: appeals.tribunal.omafra@ontario.ca
AGRICULTURE, FOOD AND RURAL AFFAIRS APPEAL TRIBUNAL
APPEAL: Henry Bos v. Chicken Farmers Of Ontario Bos v. CFO 2011 ONAFRAAT 12
STATUTE: Ministry of Agriculture, Food and Rural Affairs Act
HEARING: March 8, 2011
DATE OF DECISION: April 14, 2011
2011-12
NEUTRAL CITATION: 2011 ONAFRAAT 12
IN THE MATTER OF SECTION 16 OF THE MINISTRY OF AGRICULTURE, FOOD AND RURAL AFFAIRS ACT, R.S.O. 1990, CHAPTER M.16, AS AMENDED.
AND IN THE MATTER OF: An Appeal to the Agriculture, Food and Rural Affairs Appeal Tribunal by Henry Bos, Stevensville, Ontario, from decisions of Chicken Farmers of Ontario declining his request for the revocation of Chicken Farmers of Ontario Regulation 2274-2009 and Policy 175-2009.
Before: John O’Kane, Vice Chair; Kirk Walstedt, Chair; Tim Mousseau, Member
Appearances: Henry Bos – appellant Geoff Spurr – counsel for the respondent, Chicken Farmers of Ontario Kevin Thompson - witness for respondent John Maaskant – witness for respondent Herman Turkstra – counsel for intervenor, the Association of Ontario Chicken Processors
DECISION OF THE TRIBUNAL
This appeal was heard in Guelph, Ontario on March 7th and 8th, 2011.
Appeal Overview
Henry Bos is a chicken producer from the Niagara peninsula who wants to sell more of his production to chicken processors in the province of Quebec.
Since November 2009, as a result of a moratorium created by regulation, Mr. Bos has been capped at selling about 20% of his production to a Quebec processor and the balance of his production to Ontario processors.
Amendments to a 2005 regulation1 governing contractual arrangements between Ontario chicken producers and out of province processors, and a 2005 policy2 governing chicken production and marketing quotas implemented the 2009 moratorium.
Mr. Bos challenged as ultra vires the regulation amendment No. 2274-2009 and the policy amendment No. 175-2009 (collectively “the impugned instruments”). As developed more fully in these reasons, Mr. Bos’ appeal did not involve a constitutional vires challenge.
The Regulatory Regime
The regulation of chicken production and marketing is the product of a Federal Provincial Agreement (FPA) between the government of Canada and several provincial governments, including Ontario.
As part of its FPA commitments, the federal government established a national regulatory agency, the Chicken Farmers of Canada (CFC) under the Farm Products Agencies Act3 (FPAA).
As part of its FPA commitments, Ontario continued a provincial regulatory agency, the Chicken Farmers of Ontario (CFO), under Ontario Regulation 402, made under the Farm Products Marketing Act (FPMA). The legislature established CFO as the regulator with powers for control and regulation in any or all respects of the producing and marketing within Ontario of chickens, including the prohibition of such producing and marketing in whole or in part.4
Pursuant to the FPA commitments of the Parliament and the provincial Legislature, both CFC and CFO have enacted, within their respective jurisdictions, complementary legislation regulating chicken production and marketing.
The enabling legislation of CFC and of CFO provides that each may delegate functions to the other. CFC enacted the Chicken Farmers of Canada Delegation of Authority Order5 granting to CFO the authority to perform on CFC’s behalf, the function of allotting and administering ... federal quotas ... and, for the purpose of performing that function, to exercise on behalf of CFC the powers that it would be entitled to exercise in the performance of that function.6
The constitutional validity of such a collaborative national marketing scheme has been repeatedly affirmed by the Supreme Court of Canada since the 1978 Reference Re Agricultural Products Marketing7 (the Egg Reference) and most recently by that Court in Federation des producteurs de volailles du Quebec v. Pelland 2005 SCC 20, [2005] 1 S.C.R. 292.
Regulation 402 authorizes CFO to regulate both production and marketing through quotas and licensing. In 2005, CFO enacted its Quota Policy8 pursuant to its FPMA authority. The policy contains the following statement explaining the nature and purpose of the policy:
These quota policies ... are intended to provide a statement of how the Board intends to exercise its authority.9
CFO also enacts regulations that prescribe the conduct of the people who produce and market chicken, namely chicken farmers and processors.
In 2005, CFO enacted a regulation10 titled Requirements for the Marketing of Chicken By Producers to Out-Of-Province Processors. CFO enacted that regulation under its FPMA authority as well as its delegated authority from CFC under the FPAA. The purpose of that regulation is set out in section 2.01.
This Regulation provides for the control and regulation in any or all respects of the marketing by producers of chicken produced by them in Ontario to a processor whose plant or establishment is located outside Ontario.
Through a comprehensive set of regulatory rules, CFO controls the purchase and sale transaction between Ontario producers and processors whether in Ontario or outside Ontario. CFO’s principle control mechanism is the purchase and sale contract that is embodied in CFO documents described as “Form 101” or “101A” or “201” for example, that are referred to in both the quota policy and the regulation.
The Moratorium on Increasing Processing Contracts with Quebec Processors
The Tribunal heard evidence from Kevin Thompson, Executive Director of the Association of Ontario Chicken Processors (AOCP) and John Maaskant, a chicken farmer and Board member of CFO about the practical aspects of the chicken quota allocation system in Ontario. Mr. Bos did not challenge or contradict their evidence about the matters summarized below.
Mr. Thompson has worked in the chicken industry for 31 years; the first ten years for a chicken processor; thirteen years with CFO; and the last nine years with AOCP. AOCP is an organization that represents 11 of the 18 commercial chicken processing operations in Ontario. AOCP’s membership accounts for between 96% and 97% of Ontario’s processing capacity.
Mr. Maaskant is a long time chicken producer and a member of the CFO Board since 1989. He represents the Huron County district No. 2 and he has, during his time with CFO, served in every Board office as well as served as CFO’s representative at CFC.
Since 1994, the chicken allocation system in Ontario has been structured using a “bottom up” approach. The “bottom up” approach requires that CFO confidentially determine from Ontario processors their anticipated marketing for a quota period. CFO then aggregates those anticipated marketings and submits the aggregate to the CFC, who in turn aggregates all the provincial requests into a national quota. CFC then allocates the national quota among the provinces, and each provincial commodity board then allots quotas within the province.
Mr. Thompson explained that Ontario is unique among the provinces because of the high number of chicken processors in the province. He explained that it is fundamental for the business of Ontario processors that they have a stable, predictable supply of raw material to support the capital intensive investment in high-tech equipment and facilities required. He explained that the marketing relationship between a chicken processor and its customers is a long term relationship. He explained that the customers have very specific requests for their product and that relationship requires certainty. As an example, Kentucky Fried Chicken or McDonalds restaurants demand a continuous supply of chicken parts grown to their product specifications.
However, as explained by Mr. Thompson and Mr. Maaskant, in order for processors to reveal their anticipated marketings to CFO as part of the “bottom up” approach, they require some assurance that they will get the supply of product they need. Therefore, processor “assurance of supply” has always been a component of the “bottom up” allocation system.
Mr. Thompson and Mr. Maaskant testified that the chicken production and marketing system in Ontario has enjoyed stability derived from the bottom up approach and the processor assurance of supply. Chicken producers know in advance that they will have guaranteed markets for their chicken and a fair and reasonable price. Chicken processors know in advance that they will have an assured supply of product for their plants and to provide to their customers.
Both witnesses testified that, historically, about 2% of the Ontario chicken production was processed in Quebec processing plants. They explained that there is a population of chicken farmers located in Eastern Ontario near the Quebec border who share proximity as well as language and cultural ties with Quebec and as a result of those connections, those farmers have historically sold their production to Quebec processors.
Mr. Thompson and Mr. Maaskant testified that starting around 2003 or 2004 chicken producers from southern Ontario began selling some of their chicken to Quebec processors. By 2009, the movement of Ontario chicken to Quebec processors had increased from the historical level of 2% to between 8% and 10%. As explained by Mr. Thompson and Mr. Maaskant, that increased movement of Ontario chickens to Quebec created increasing instability in the Ontario market, and that instability is a concern to chicken producers, chicken processors and CFO.
Part of the concern expressed by Mr. Thompson was that Ontario was receiving an allocation of chicken quota from CFC derived from anticipated marketing projections from Ontario processors; however, an increasing percentage of that allocation was not being marketed to those Ontario processors. He testified that Ontario producers were increasingly shipping to Quebec processors to get a premium price, and that was a concern for the industry due to that additional cost. He testified that, as a result, Ontario processors had to buy Quebec chicken in order to make up the shortfall in supply. He described that as causing added costs to the industry. He also pointed out the economic inefficiency of trucks carrying Ontario chickens passing trucks carrying Quebec chickens, each destined for processing plants in different directions. He explained that those effects were undermining the allocation system and impacting the Ontario processing industry.
Mr. Maaskant testified about the effect of increasing movement of Ontario chicken to Quebec. He explained the result was the supply of chicken within Ontario decreased and the element of “assurance of supply” for Ontario processors diminished. He described that situation as instability. He testified that it is difficult to maintain a stable system without that “assurance of supply”.
Both Mr. Thompson and Mr. Maaskant testified that the Farm Products Council of Canada (FPCC) which oversees CFC, and the National Association of Agri-Food Supervisory Agencies (NAASA), which is an organization of all the provincial oversight agencies, both provided direction to the chicken industry to find a solution to the instability derived from the increasing levels of interprovincial chicken movement between Quebec and Ontario.
Acting on that direction from the supervisory oversight bodies, CFO, in consultation and in conjunction with its Quebec counterpart, Les Eleveurs de volailles du Quebec (EVQ), each introduced moratoriums in the fall of 2009. The moratoriums capped at the 2009 levels the inter-provincial movement of chicken between Ontario and Quebec. The moratoriums were intended to be temporary measures until the industry could find a resolution. CFO, together with EVQ and the processing industries in both provinces, began discussions in 2009 about finding a resolution.
Mr. Maaskant testified that no Ontario processor had challenged the moratorium and that no producer, other than Mr. Bos, had challenged the moratorium. He also testified that he was unaware of any processors in Quebec having challenged the moratorium in that province.
According to Mr. Thompson and Mr. Maaskant, the resolution of that industry instability was embodied in an agreement executed in January 2011. The parties to that agreement included CFO and EVQ, AOCP and its Quebec counterpart, L’association des Abbatoirs Avicoles du Quebec (AAAQ). Those parties are currently in the process of implementing the agreement’s terms. Once implemented through CFO regulation and policy, the allocation system will provide that Ontario processors will have a time limited priority to make contract arrangements with Ontario chicken producers. After that priority time ends, the Quebec processors will then have the opportunity to make contract arrangements with Ontario producers. The implementation of the agreement in Quebec will have a similar but opposite priority for Quebec processors. The goal of the agreement, according to Mr. Thompson, is to harmonize the Ontario and Quebec processor allocations systems. Mr. Thompson was clear that processors and producers can contract where they choose, be it in Ontario or in Quebec. He was also adamant that the agreement does not dictate marketing contract levels in Ontario or Quebec.
The agreement between CFO, EVQ, AOCP and AAAQ reflects, among other things, its purpose in paragraph 5 of the “BACKGROUND” section.
The principle purpose of this Memorandum of Agreement (the “Agreement”) is to provide particulars of the manner in which CFO and EVQ will alter their respective processor allocation systems so that contracting between producers and processors in Ontario and Quebec will occur subject to substantially similar rules so as to improve and refine the operation of the existing supply assurance systems in each province. In doing so, each party is acting within its own jurisdiction under the Constitution Act of 1892 without creating any restriction to the free flow of chicken in inter provincial trade.
The moratoriums in Ontario and Quebec are addressed as follows in paragraph 5.01 of Article V of the agreement.
CFO and EVQ each placed a moratorium on new interprovincial marketing arrangements between producers in their respective provinces and out of province processors effective for quota period A-96 for Ontario and A-97 for Quebec. This moratorium has been renewed and extended and continues to be in effect. The parties agree that the Quebec and Ontario moratoriums should be maintained to such an extent that the removal of them is coordinated to coincide with the implementation of the terms of this Agreement plus one full quota period afterward.
Therefore, according to the uncontradicted evidence and the terms of the January 2011 agreement, we find as a fact that the moratorium in Ontario is temporary and will be phased out, as CFO implements the agreement terms.
While it was not disputed in this appeal, we find as a fact that CFO’s intention behind the impugned instruments was to temporarily maintain as the status quo, the November 2009 levels of interprovincial movement of Ontario chicken to Quebec processors.
While it was not challenged in the context of this appeal, we also find as a fact that CFO’s rationale for enacting the impugned instruments was to address an increasing instability in the chicken production and processing industry in Ontario, the industry that CFO is responsible for regulating.
Henry Bos
Henry Bos farms in Stevensville and he holds production and marketing quota allotted to him by CFO. While Mr. Bos’ chicken production was previously based on an eight week cycle, he currently operates on a nine week cycle. Nothing material in this appeal turns on the length of the cycle but it coincides with the period between when the birds hatch and when Mr. Bos sells them to a chicken processor. Mr. Bos’ basic quota is 34,025 quota units. When expressed in kilograms, that basic quota translates to 71,197 kilograms. In every quota period therefore, he is entitled to produce and market that quantity of chicken.
Mr. Bos’ poultry farm also holds a licence under the Canadian Chicken Licensing Regulations11 enacted by CFC.
During a preliminary hearing of this matter on May 28th, 2010, the Tribunal investigated the scope of Mr. Bos’ ultra vires challenge to determine if it included a constitutional component. Following that preliminary hearing, in a Pre-Hearing Conference Decision of June 8th, 2010, the Tribunal suggested Mr. Bos seek legal advice about the procedural requirements for making a constitutional challenge, and directed that he confirm in writing if he intended to pursue a constitutional vires challenge. On July 5th, 2010 Mr. Bos delivered a letter confirming that he was not advancing a constitutional challenge. Mr. Bos did not provide the Attorney Generals of Ontario and Canada with the notice required by section 109 of the Courts of Justice Act, and Rule 27 of the Tribunal’s Rules of Procedure.
The essence of Mr. Bos’ challenge to the policy amendment and the regulation amendment is that the effect of those amendments removes his freedom to sell his chicken to whomever he chooses. He explained, in his evidence and his arguments, that the “core character” of the impugned policy amendment and regulation amendment is to control the inter-provincial movement of chicken, and that control was beyond CFO’s jurisdiction. He testified the impugned policy amendment and regulation amendment prevent him the freedom to market more than 9,025 quota units inter-provincially. The 9,025 quota units reflect the level of Mr. Bos’ contracts with a Quebec processor at the time when CFO introduced the moratorium in November 2009.
Mr. Bos did not introduce any financial or economic evidence to suggest that the impugned policy amendment and regulation amendment had an adverse effect on his business. He did not testify that the moratorium interfered with a maturing opportunity to increase his chicken marketing in Quebec. He did not testify about why he would choose to market more of his chicken in Quebec. The essence of his case was that the impugned policy amendment and regulation amendment interfered with his freedom to choose where he markets his chicken.
Mr. Bos agreed during cross-examination that extra-provincial marketing has a direct effect on chicken supplies in Ontario that would otherwise go to Ontario processors.
The Issues
Mr. Bos focused his arguments about Regulation 2274-2009 and Policy No. 175-2009 on their “core character”, which he argued halts inter-provincial trade in chicken.
In support of those arguments he referred the Tribunal to paragraph 31 of the Pelland decision.
Mr. Pelland was a Quebec chicken producer who “grossly exceeded” his allocated quota. In response to that, EVQ imposed a penalty of more than $2 million and reduced Mr. Pelland’s quota to zero. Mr. Pelland then challenged EVQ’s penalties by attacking the constitutional validity of the federal-provincial scheme for the production and marketing of chicken.
Mr. Pelland did not challenge the validity of the provincial regulatory regime for chicken. He argued however, that the provincial regulatory regime could only apply to the production of chickens destined for the Quebec market. Since Mr. Pelland’s entire production was destined for the extra-provincial market, he argued that it was no longer a provincial matter and, therefore, it was beyond the authority of the provincial regulator (EVQ).
The passage in paragraph 31 that Mr. Bos focused on was that part of Madam Justice Abella’s comments about the “pith and substance” analysis conducted by the Supreme Court of Canada in a long line of cases culminating in the Egg Reference.
Mr. Pelland had focused his argument on then Chief Justice Laskin’s statement in the Egg Reference that the provincial law and regulation at issue would not be valid if they occurred “with a view to limiting interprovincial or export trade”. However, Madam Justice Abella went on to point out at paragraphs 18 and 19:
However, this comment was made in the context of considering whether the law and regulations were in pith and substance a provincial matter. Ultimately, as explained later in these reasons, Laskin, C.J. found that they were. This comment, therefore, does not support the proposition that provincial laws found valid under a pith and substance analysis are inapplicable to export trade.
Contrary to Mr. Pelland’s submissions, in my view the pith and substance of the provincial marketing Act and the provincial chicken regulations are at the heart of this appeal. In order to determine whether the provincial component of the scheme is unconstitutional because it intrudes into a federal head of power, it is necessary first to determine its core character.
After the pith and substance analysis, the Supreme Court in Pelland found the provincial law and regulation to be valid and dismissed Mr. Pelland’s constitutional challenge.
There is a strong similarity between Mr. Bos’ arguments and the arguments advanced by Mr. Pelland in the Pelland case. However, as noted above in these reasons, Mr. Bos’ appeal does not involve a constitutional challenge. Mr. Bos’ submissions about the “core character” of the impugned instruments engages a “pith and substance” analysis.
Therefore, the narrower issue for the Tribunal is whether CFO’s policy amendment No. 175-2009 and regulation amendment No. 2274-2009 are beyond the authority of the CFO and therefore ultra vires. The analysis to be conducted is similar to the analysis the New Brunswick Queen’s Bench conducted in the Groupe Westco Inc. v. Province of New Brunswick (2010) NBQB 217 (Westco) case relied on by Mr. Bos.
The facts in Westco evolved from an earlier case Nadeau Poultry Farm Limited v. The New Brunswick Farm Products Commissions, Chicken Farmers of New Brunswick and Groupe Westco Inc. (2009) NBCA 48 (Nadeau).
Westco is a vertically integrated chicken producing/processing operation that owns 51% of the New Brunswick chicken quota. Westco served notice on Nadeau, the only poultry processor in New Brunswick, that it intended to move its chicken to its own processing plant located in Quebec. For Nadeau, that could have meant the end of its processing business, which would mean the loss of a significant number of jobs in New Brunswick.
In response, Nadeau asked the provincial regulator, the Chicken Farmers of New Brunswick (CFNB), to issue a plant supply allocation order requiring that all New Brunswick producers process a portion of their chicken production at the Nadeau plant.
CFNB rejected Nadeau’s request and Nadeau appealed to the provincial oversight agency, the Queen’s Bench and eventually the New Brunswick Court of Appeal. At each level Nadeau was unsuccessful.
Presumably, in response to the outcome of the Nadeau case, the New Brunswick legislature amended the Natural Products Act12 to introduce section 41.1 that would authorize the provincial Minister of Agriculture and Aquaculture to designate the plants where chicken may be processed in New Brunswick. (Emphasis added) The Minister then issued a Ministerial Order under the authority of section 41.1. That Order designated the Nadeau plant as the processing facility where chicken grown in New Brunswick shall be processed. (Emphasis added)
Westco then asked the Queen’s Bench to quash the Ministerial Order as ultra vires the power granted to the Minister. The Court concluded the amendment to the Natural Products Act did not prohibit the export of chicken, but rather, regulated the processing of chicken that producers chose to have processed in New Brunswick. The Court concluded the amendment “in pith and substance” was concerned with regulating the chicken processing industry within the province. However, the Ministerial Order, in both purpose and effect, was directed towards interprovincial trade because the Order created a prohibition to export chicken outside New Brunswick for processing. The Court struck down the Ministerial Order as ultra vires because it exceeded the power granted to the Minister by the amendment to the Natural Products Act.
The Core Character or Pith and Substance Analysis
Mr. Bos had argued that we should look only to the pith and substance of the amending Regulation No. 2274-2009 but we conclude that such an approach is inappropriate. The preferred approach is to consider the pith and substance of Regulation No. 2274-2009 in the context of the regulation that it amends, Regulation No. 2072-2005, and in the context of Regulation 402 and in the context of the FPMA.
The Supreme Court’s discussion in the Pelland case guides our pith and substance analysis which looks at both the purpose of the legislation as well as its effect.
The purpose of the FPMA is to provide for the control and regulation in any or all aspects of the producing and marketing within Ontario of farm products including the prohibition of such producing or marketing in whole or in part13. Chicken is one such farm product.
In the context of the FPMA, the legislature defined “marketing” broadly to include “offering for sale” and “processing” and “selling”.
In section 5 of Regulation 402, the legislature listed specific powers delegated to CFO which includes the power to make regulations for, among other things:
(j) providing for the control and regulation of the marketing of chickens, including the times and places at which chickens may be marketed;
(k) providing for the control and regulation of agreements entered into by producers of chickens with persons engaged in marketing or processing chickens, and the prohibition of any provision or clause in such agreements;
Regulation 402 clearly grants CFO regulatory authority over marketing chickens and regulatory authority over agreements between chicken producers and processors.
In practice, marketing is a transaction typified by a purchase and sale. Before any actual processing of chickens into chicken products there is a sale of chickens by a producer and a purchase of chickens by a processor. CFO is granted authority to exercise regulatory control over the transaction between producer and processor, regardless the ultimate destination of the chicken.
Taken together, the FPMA and Regulation 402 provide the basis for CFO’s authority to enact policy and regulation that controls Mr. Bos marketing his chicken to processors.
Indeed, CFO’s underlying policy and regulation have, since 2005, operated as a regulatory control over Ontario producers marketing to Quebec processors. This appeal does not involve a challenge to that underlying policy and regulation, but only to the 2009 amendments that implemented the moratorium. However, our analysis includes consideration of the pith and substance of the underlying regulation.
CFO’s Regulation 2072-2005 is entitled Requirements for the Marketing of Chicken By Producers to Out-Of-Province Processors and the following provisions of that regulation are relevant in our analysis.
This Regulation provides for the control and regulation in any and all respects of the marketing by producers of chicken produced by them in Ontario to a processor whose plant or establishment is located outside Ontario. (Section 2)
The out of province processor must apply to CFO on a Form 101A to contract with an Ontario producer. (Section 4.01)
The purchase contract between producer and processor must be in accordance with the regulation and CFO’s Form 101 (Section 4.03)
All chicken shall be purchased and sold “Freight on Board” (F.O.B.) the Ontario producer’s premises at the time it is received by the processor. (Section 4.14)
The Form 101 is deemed to contain a term permitting CFO access to all books and records related to the marketing including access to trucks transporting the chickens and to approved scales used by the processor. (Section 4.18)
Transportation of the chickens is controlled by a CFO Form 6. (Section 6.01)
Once the chickens are loaded for transport from the Ontario producer to the processor, the load must be immediately taken to an approved scale for weighing and documentation. The regulation defines an approved scale to mean a weight scale within Ontario. (Section 6.03 and section 1 definitions)
The processor is obliged to pay the producer the purchase price for the chicken received at the Ontario producer’s premises. (Section 7.02)
The processor is obliged to either pay for a catching crew to catch the chickens at the Ontario producer’s premises or to reimburse the producer for the costs of catching the chickens. (Section 7.08)
The processor is obliged to pay the producer a minimum price for the chicken. (Section 7.09)
The processor is obliged to file information reports with CFO after receiving chicken from Ontario producers. (Section 8)
Processors are obliged to post irrevocable Letters of Credit with CFO as security. (Section 10)
CFO can draw on the processor Letters of Credit where a processor refuses to accept the chicken it contracted for on the Form 101 or where it fails to pay the producer. (Section 11)
Each of those listed provisions connects the marketing transaction between producer and processor to the province of Ontario. As a result, the fact that the birds ultimately cross the Ontario-Quebec provincial border for processing is incidental.
Therefore, in our view, the pith and substance of Regulation 2072-2005 is the regulation of marketing transactions that occur within Ontario, and that is wholly within the authority granted by the Province to CFO under the FPMA and Regulation 402.
The impugned Regulation No. 2274-2009 amends Section 4 of Regulation No. 2072-2005 to provide that, beginning around November 2009, CFO will not accept or approve any more marketing contracts between Ontario producers and out of province processors.
While it is true that the impugned instruments create a temporary cap at the 2009 levels of the interprovincial movement of chicken, the pith and substance of the impugned instruments remains the regulation of chicken marketing in Ontario. The fact that the moratorium creates a temporary cap on interprovincial movement of chicken is incidental. That incidental fact does not change the regulation’s core character which is controlling marketing transactions that occur in Ontario. In addition, based on the uncontradicted evidence of Kevin Thompson and John Maaskant, the moratorium that created that temporary cap is being phased out as the new processor allocation agreement is implemented.
Unlike the Ministerial Order in the Westco case, the moratorium did not create a prohibition on exporting chicken outside Ontario for processing; rather it maintained the level of export at the 2009 levels.
In addition, unlike the blanket prohibition created by the Ministerial Order in Westco, the Ontario moratorium is a temporary measure that is being phased out.
Therefore, CFO Policy 175-2009 and CFO Regulation No. 2274-2009 are not ultra vires the FPMA and Regulation 402.
Having concluded CFO has the authority under provincial legislation to enact the underlying policy and regulation and the 2009 amendments, it is unnecessary for us to consider whether CFO has authority under delegated federal legislation.
Tribunal Order
Therefore, the Tribunal Orders:
Henry Bos’ challenge of CFO Policy 175-2009 is dismissed.
Henry Bos’ challenge of CFO Regulation 2274-2009 is dismissed.
Dated at Brampton, Ontario this 14th day of April, 2011
Footnotes
- Regulation No. 2072-2005
- Policy No. 170-2005
- S.C. Chapter F-4
- Regulation 402, R.R.O. 1990, section 2
- SOR/2003-274
- SOR/2003-274, section 2(1)
- 1978 CanLII 10 (SCC), [1978] 2 S.C.R. 1198
- Policy No. 170-2005
- Quota Policy No. 170-2005, section 1.01
- Regulation No. 2072-2005
- SOR/2002-22
- S.N.B. 1999, c.N-1.2
- FPMA, R.S.O. 1990, Chapter F-P, section 2