Christian Farmers Federation of Ontario Accreditation (Re), 2012 ONAFRAAT 32

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 Courriel: appeals.tribunal.omafra@ontario.ca

AGRICULTURE, FOOD AND RURAL AFFAIRS APPEAL TRIBUNAL

APPEAL:

Christian Farmers Federation of Ontario Accreditation

CFFO Accreditation (RE) 2012 ONAFRAAT 32

STATUTE:

Farm Registration and Farm Organizations Funding Act, 1993

HEARING:

July 21, 2012

DATE OF DECISION:

November 7, 2012

2012-32

NEUTRAL CITATION:

2012 ONAFRAAT 32

Christian Farmers Federation of Ontario Accreditation

IN THE MATTER OF: SECTIONS 4 AND 5 OF THE FARM REGISTRATION AND FARM ORGANIZATIONS FUNDING ACT, 1993.

AND IN THE MATTER OF: An application to the Agriculture, Food and Rural Affairs Appeal Tribunal by the Christian Farmers Federation of Ontario (CFFO) for accreditation under Subsection 4(1) of the Act.

Before: Nicholas Richter, Vice-Chair; Jane Sadler Richards, Member; Mary Field, Member

Appearances:

Lorne Small, President, CFFO

Nathan Stevens, Interim Manager, CFFO

Frances Pitkin, Office Manager, CFFO

DECISION OF THE TRIBUNAL

Background

This matter was heard by the Agriculture, Food and Rural Affairs Appeal Tribunal (the “Tribunal”) on July 21, 2012, in the Tribunal Boardroom, Guelph, Ontario. The Christian Farmers Federation of Ontario (the “CFFO”) applied to the Tribunal to become an accredited farm organization pursuant to section 4(1) of the Farm Registration and Farm Organizations Funding Act, 1993 (the “Act”). The CFFO had lost its accreditation as a result of the Tribunal’s decision dated May 23, 2012 (the “May 23 Decision”), in which the Tribunal refused to grant the CFFO reaccreditation pursuant to section 4(2) of the Act.

The Minister of Agriculture, Food and Rural Affairs (the “Minister”) was given notice of the hearing pursuant to section 4(4) of the Act. At the time of the hearing, there were no accredited farm organizations, and therefore no further notice was required under section 4(4) of the Act. The Minister did not take part in the hearing, other than to make written submissions in response to the Tribunal’s interim order of August 10, 2012, further described below. In his written submissions, the Minister took no position on whether the CFFO’s application should be granted, nor was he asked to do so.

The Issue

The sole issue on this application is whether the CFFO meets the requirements for accreditation set out in section 5 of Ontario Regulation 723/93 (the “Regulation”). The Regulation sets out a number of criteria that an applicant must meet before the applicant can become an accredited farm organization. Those criteria are fully set out below. Pursuant to section 6(1) of the Act, if the Tribunal determines that the organization applying for accreditation meets the prescribed criteria, then the Tribunal “shall” accredit the organization. If, on the other hand, the Tribunal determines that the organization does not meet the prescribed criteria, then the Tribunal “shall” refuse the accreditation. As the mandatory wording of section 6(1) makes clear, the Tribunal has no discretion in granting or withholding accreditation. If the criteria are met, the Tribunal must accredit; if the criteria are not met, the Tribunal must refuse accreditation.

The Legislative Scheme

Pursuant to section 2(1) of the Act, every person who carries on a farming business whose annual gross income of the farming business equals or exceeds the prescribed amount (currently $7,000) is required to file with the Minister a completed farming business registration form (an “FBR Form”). Pursuant to section 21(1) of the Act, every person required to file an FBR Form must, when filing the form, provide to the Ministry of Agriculture, Food and Rural Affairs (the “Ministry”) payment of the prescribed amount (currently $195) payable to an accredited farm organization. Upon receiving the FBR Form and the payment, the Ministry then assigns a registration number (commonly known as an “FBR Number”) to the person filing as provided in section 21(4) of the Act. The Ministry is also required to forward the payments received to the appropriate organization along with the names, addresses, telephone numbers, and registration numbers of those who provided the payments in accordance with section 21(3) of the Act. The FBR Number is important to farmers because, as set out in section 23(2) of the Act, only a person with a current FBR Number is entitled to benefit from certain programs provided by the Ministry.

The Act contemplates that some persons carrying on a farming business may not want to make payments to, or become members of, an accredited farm organization. Section 22 of the Act, for example, provides that persons carrying on a farming business who object to making payment to a farm organization or filing an FBR Form because of their religious convictions or beliefs may apply to the Tribunal for an order waiving those requirements. Section 21(7) of the Act provides that a person who files an FBR Form and provides the prescribed payment may apply to the appropriate organization for a refund of the amount paid. Finally, section 21(10) of the Act provides that payment under section 21 “does not confer membership in the farm organization.” Section 21(10) appears to be directed at persons who do not want to belong to an accredited farm organization but are required to register under section 21 of the Act. It would provide relief, for example, to persons who do not qualify for a religious exemption under section 22 of the Act but who nevertheless object to becoming members of an accredited farm organization.

This farm business registration process results in the transfer of funds, via Agricorp, from farmers to farm organizations. In the case of the CFFO, those transfers are close to $900,000 per year. The farm organizations use those funds as operating revenues to carry out their objectives. As membership numbers generally do not change significantly from year to year, the registration process provides stable funding to the farm organizations so that they can plan their future operations.

Accreditation of farm organizations is central to this legislative scheme. While there are many farm organizations in the province, only accredited farm organizations are eligible to receive funding under the farm business registration process. If a farm organization wishes to avail itself of this funding, it must first apply for and obtain accreditation under the Act.

The legislation assigns responsibility for accrediting farm organizations to the Tribunal. Section 4(1) of the Act provides that applications for accreditation are to be made to the Tribunal. Section 5 of the Act requires the Tribunal to hold a hearing before determining whether a farm organization should be accredited. While the Minister has a statutory right to receive notice of the hearing and to make submissions at the hearing (as a result of sections 4(4) and 5(2) of the Act), the decision as to whether to accredit a farm organization lies solely with the Tribunal, acting within its jurisdiction. Pursuant to section 30 of the Act, the Tribunal’s decision is final.

In deciding whether to accredit a farm organization, the Tribunal is required to determine whether the applicant meets a number of criteria set out in section 5 of the Regulation. For an organization that is not currently accredited, such as the CFFO, the relevant criteria are:

5. (1) Subject to the other provisions of this section, a farm organization qualifies for accreditation if it meets the following criteria:

6. It has at least 250 members who,

i. carry on a farming business in Ontario, and

ii. have paid the membership fee.

2. The majority of the members of the farm organization carry on a farming business for which there is a current farming business registration.

3. It has an annual membership fee, including applicable taxes, of at least $195 for each member.

4. It is incorporated under a general or special Act of the Legislature.

5. Its purpose is to represent persons carrying on farming businesses.

6. It provides education or training in respect of agricultural matters.

7. It has an executive body at the provincial level that is elected by its members or by electors chosen by members.

8. It has an established process whereby individual members have the right to make submissions on relevant issues of concern and the executive body has the duty to consider the submissions and respond.

9. It provides advice and analysis to governments, administrative tribunals or advisory bodies concerning agricultural issues and the development of programs or policies that are of interest to persons carrying on farming businesses.

10. If it is an unaccredited organization, it has submitted to the Tribunal audited financial statements for its most recent completed fiscal year and the auditor’s report on those financial statements.

11. It has at least twelve local affiliates each of which represents members carrying on farming businesses in a different area of Ontario.

12. It contributes to the local affiliates referred to in paragraph 11 an amount that equals or exceeds 25 per cent of,

i. in the case of a farm organization that is not accredited, the amount that is obtained when the number of members it had in the most recent completed fiscal year before the day in which application for accreditation is made is multiplied by $195 less the amount that would be payable in taxes if this amount were being charged as a membership fee . . .

14. It has entered into, or agreed to enter into, an agreement with the Minister and the accredited farm organizations to provide special funding to the francophone organization that is eligible for special funding under section 12 or 13 of the Act.

(2) A farm organization does not meet the criterion prescribed in paragraph 5 of subsection (1) if it represents only persons carrying on a farming business in which only certain crops, livestock or poultry are raised or in which only certain agricultural products are produced.

(3) A farm organization does not meet the criteria prescribed in paragraphs 10 and 13 of subsection (1) unless,

(a) the financial statements include a balance sheet, a statement of members’ equity, a statement of revenues and expenses and a statement of changes in financial position, however those statements are entitled;

(b) the financial statements and auditor’s report are prepared in accordance with the standards set forth in the Handbook of the Canadian Institute of Chartered Accountants; and

(c) the financial statements show the amount received under subsection 21(3) of the Act and the number of refunds made by the organization under subsection 21(8) of the Act during the fiscal year and the per cent of the applicable amounts received under paragraph 12 of subsection (1) that the organization has contributed to branches referred to in paragraph 11 of subsection (1) during the fiscal year.

(4) A farm organization does not meet the criterion prescribed in paragraph 11 of subsection (1) unless each local affiliate,

(a) has at least ten members, each of whom has paid the membership fee, carrying on farming businesses in the area concerned;

(b) has a local affiliate executive elected by the affiliate’s members;

(c) has an annual general meeting; and

(d) is entitled to send a representative to any meeting of the farm organization to which representatives of local affiliates are invited.

As noted earlier, the Tribunal has no discretion under section 6(1) of the Act in determining whether to accredit a farm organization. If the Tribunal determines that the criteria have been met, then the Tribunal must accredit the organization. If the Tribunal determines that even one of the criteria has not been met, then the Tribunal must refuse accreditation. In each case, the Tribunal’s role is to interpret the legislation and to assess the evidence before the Tribunal in order to determine whether the legislative requirements for accreditation have been met. The onus is upon the applicant to satisfy the Tribunal that the applicant has met all of the legislative requirements.

Section 6(2) of the Act provides that accreditation is valid for three years. Once accredited, a farm organization may apply within a specified timeframe to renew its accreditation for a further three years pursuant to section 4(2) of the Act. Reaccreditation is not automatic, and the applicant must satisfy the Tribunal each time that it has met all of the legislative requirements for reaccreditation. The Tribunal also has the power under sections 8-10 of the Act to review the accreditation of a farm organization and, if appropriate, to remove or suspend that organization’s accreditation. In addition, a farm organization may apply to the Tribunal under section 11 of the Act to have its accreditation removed. In this way, the legislative scheme provides for regular oversight by the Tribunal of accredited farm organizations to ensure that those organizations continue to meet the legislative requirements for accreditation.

The Membership Issue

A key element of the legislative scheme is the concept of membership in a farm organization. The words “member,” “members,” and “membership” appear throughout section 5 of the Regulation. In addition, as previously noted, section 21(10) of the Act specifically provides that payment of the prescribed amount under section 21 of the Act does not confer membership in the farm organization. This repeated use of the word “member” (and the related words “members” and “membership”) in the legislation raises two important issues: (1) the meaning of the word “member” in the relevant legislative provisions, and (2) whether that meaning should be applied consistently in interpreting those legislative provisions.

Dealing with the second issue first, there is a principle of statutory interpretation commonly known as the “presumption of consistent expression.” As stated in Sullivan on the Construction of Statutes, 5^th ed., at pp. 214-215, “[i]t is presumed that the legislature uses language carefully and consistently so that within a statute or other legislative instrument the same words have the same meaning and different words have different meanings.” Although the presumption is rebuttable, it is frequently applied by courts and tribunals in interpreting legislation. The presumption is particularly strong where, as in this case, the provisions in which the repeated words appear are close together or otherwise related to each other (see Sullivan, supra, at pp. 215-216 and 221).

By way of an interim order dated August 10, 2012 (the “Interim Order”), the Tribunal invited the CFFO and the Minister to make written submissions as to whether the presumption of consistent expression applies to the interpretation of the word “member” in section 5 of the Regulation. The Tribunal made the Interim Order because it became concerned at the hearing of the CFFO’s application that the CFFO was attaching different meanings to the word “member” for different criteria under section 5 of the Regulation. The Tribunal ordered the parties to serve and file their submissions, if any, by no later than August 24, 2012.

Both the CFFO and the Minister made written submissions in response to the Interim Order. Both agreed that the presumption of consistent expression applies to the interpretation of the word “member” in section 5 of the Regulation. The Minister further submitted that (1) nothing in the text or the context of section 5 rebutted the presumption, and (2) both the text and the context of section 5 strongly supported the application of the presumption in this case. In addition, the Minister expressed the following concern about not applying the presumption:

An accreditation process needs to be clear, consistent and objective. This cannot happen if the word “member” in section 5 of [the Regulation] is given a different meaning throughout. Indeed, to do so would undermine the accreditation process. It would create a varying and potentially unstable base-line in which to adjudge whether a farm organization should be accredited, which could, in turn, undermine the accreditation process.

The Tribunal agrees that the presumption of consistent expression applies in this case, for the following reasons:

1. as the Supreme Court of Canada stated in R. v. Zeolkowski, 1989 CanLII 72 (SCC), [1989] 1 S.C.R. 1378 at 1387, “[g]iving the same words the same meaning throughout a statute is a basic principle of statutory interpretation”;

2. the word “member” is not defined in the legislation, which suggests that the ordinary meaning of the word was intended to be applied throughout;

3. there is nothing in the text or the context of section 5 of the Regulation to suggest that the meaning of the word “member” was intended to vary within that section;

4. the word “member” appears repeatedly in the same section of the Regulation, which weighs heavily in favour of applying the presumption; and

5. the Tribunal agrees with the Minister that applying different meanings to the word “member” could introduce an element of instability or unpredictability into the interpretation of the relevant legislative provisions, which could undermine the accreditation process.

Having determined that the presumption of consistent expression applies to the interpretation of the word “member” in the relevant legislative provisions, the Tribunal must now determine the meaning of that word. In doing so, the Tribunal is mindful of the approach taken by the Supreme Court of Canada in Canada Trustco Mortgage Co. v. Canada, 2005 SCC 54, [2005] 2 S.C.R. 601 at 620: “There is but one principle of interpretation: to determine the intent of the legislator having regard to the text, its context, and other indicators of legislative purpose.”

As noted earlier, the word “member” is not defined in the legislation. This suggests that the word was intended to have its ordinary meaning. In the context of an organization, the word “member” usually refers to someone who belongs to the organization. A person typically becomes a member of an organization through some form of mutual agreement or consent. For example, a person may apply to an organization to become a member, and the organization may then accept that person as a member. Alternatively, an organization may solicit a person to become a member, and that person may then accept the offer of membership.

The legislation does not impose any particular formalities on becoming a member of a farm organization. As a general rule, the legislation leaves it up to each farm organization to determine who is eligible for membership and how a person becomes a member of the farm organization. Typically, a farm organization will enact membership criteria in its by-laws, and will then implement procedures under which interested parties who meet the criteria can become members of the farm organization. A farm organization may have different categories of membership for different types of members (for example, corporations, individuals, farmers, retired farmers, or suppliers). So long as a farm organization complies with all applicable laws, it has a fair degree of latitude in determining its membership.

Special care is required, however, in two situations. First, a farm organization that intends to seek accreditation under the Act should be careful to define its membership in a manner consistent with the criteria for accreditation under section 5 of the Regulation. For example, section 5(1)3 of the Regulation provides that each member must pay an annual membership fee, including applicable taxes, of at least $195. As section 5(1)3 does not distinguish between different types of members, it would be contrary to that section for a farm organization seeking accreditation to have a membership fee of less than $195 for one or more categories of members.

Second, a farm organization that receives payments under section 21 of the Act must be very careful in establishing membership criteria and procedures for the persons making those payments. As noted earlier, section 21(10) of the Act provides that payment of the prescribed amount under section 21 of the Act does not confer membership in the farm organization receiving the payment. This provision protects persons who are required to register under the Act from becoming members of a farm organization by default. As a result, some further step is required before a person making a payment under section 21 of the Act can be treated as a member and before that person’s payment can be treated as a membership fee by the farm organization.

In its May 23 Decision, the Tribunal found that this further step is the creation of an explicit membership agreement between the person making a payment under section 21 of the Act and the farm organization. The Tribunal held that an explicit membership agreement is reached when the person making the payment explicitly applies for membership in the farm organization, and the farm organization receiving the payment explicitly accepts the membership application and communicates that acceptance to the applicant. Although the May 23 Decision is not binding on the Tribunal in this case, the Tribunal’s findings on this issue were not challenged by the CFFO, and the Tribunal sees no reason to depart from them.

Although the legislation does not specifically address the issue, it would be prudent for a farm organization seeking accreditation to ensure that all memberships are documented in writing. Where an explicit membership agreement is required, documenting that agreement in writing eliminates all doubt as to whether the person making the payment under section 21 of the Act can properly be treated as a member of the farm organization. Even where an explicit membership agreement is not required, however, it makes sense to document those memberships in writing in case they are challenged at an accreditation hearing. While oral evidence is admissible at an accreditation hearing, documentary evidence is frequently more persuasive and might also be more efficient if a large number of memberships were challenged.

Based on the above analysis, the Tribunal finds that, for the purposes of the relevant legislative provisions, a member is a person who belongs to a farm organization in accordance with the farm organization’s membership criteria and procedures. Where a person makes a payment to a farm organization under section 21 of the Act, there must be an explicit membership agreement between the parties (consisting of an explicit application for membership, an explicit acceptance of that application, and an explicit communication of that acceptance to the applicant) before the person making the payment can be treated as a member and before the payment can be treated as a membership fee by the farm organization. Although not strictly required under the legislation, it would be prudent for any farm organization seeking accreditation to document all of its memberships in writing.

The CFFO’s Application

In order to be accredited as a farm organization, the CFFO must satisfy all of the applicable criteria set out in section 5 of the Regulation. The CFFO filed extensive documentary evidence with the Tribunal, and also gave oral evidence and made both oral and written submissions in support of its application for accreditation. The Tribunal has reviewed the relevant evidence and provided its analysis below, organized by the applicable criteria set out in section 5 of the Regulation. The criteria are grouped and organized logically, which does not necessarily correspond to the order in which they appear in the Regulation.

5(1)1. It has at least 250 members who,

i. carry on a farming business in Ontario, and

ii. have paid the membership fee.

Under its by-laws, the CFFO has two categories of members: (1) signed members, who pay the annual fee, request membership, and sign a statement indicating their agreement with the basis and purpose of the CFFO, and (2) members, who pay the annual fee and request membership but do not sign the statement indicating their agreement with the basis and purpose of the CFFO. The only significant difference between these two categories of members is that only signed members have the right to sit on the CFFO’s executive board. In all other relevant respects, both signed members and members have all of the rights and privileges of membership, including the right to vote. In order to avoid confusion, the Tribunal will refer to these two categories of members as “signed members” and “unsigned members” respectively, and will use the term “members” to refer collectively to both signed and unsigned members.

In addition to the two categories of members described above, the CFFO’s by-laws provide that a person may become a supporter of the CFFO by paying the annual fee. Supporters are not members of the CFFO and do not have the right to vote. They do have the right to attend any meeting of the CFFO that is open to the public. Lorne

Small, President of the CFFO, explained that the supporter category was created to address the needs of persons who share the CFFO’s values but who, usually for faith-based reasons, do not wish to become members.

For the purposes of this application, the Tribunal accepts that supporters are not members within the meaning of the legislation, as they do not have the rights and privileges of members and do not fall within the membership criteria set out in the CFFO’s by-laws. The Tribunal expresses some concern, however, that persons who make a payment to the CFFO under section 21 of the Act may not wish to become supporters any more than they wish to become members. Although the CFFO’s by-laws provide that a person who requests a refund under section 21(7) of the Act is not a supporter, there is a period of time between the making of the payment and the processing of the request for a refund during which the person making the payment might be treated as a supporter by the CFFO against that person’s wishes. It would be prudent for the CFFO to put appropriate protections in place to ensure that only those persons who wish to become supporters are treated as supporters by the CFFO.

The CFFO presented evidence that it had 301 members as of July 20, 2012, consisting of 266 farm business registrants and 35 personal members. Farm business registrants include both signed and unsigned members. Personal members are all signed members and consist primarily of retired farmers and persons who are registered with another farm organization but also wish to be members of the CFFO. The 301 members claimed by the CFFO on this application are a subset of the approximately 4,100 persons who were treated as members by the CFFO prior to the May 23 Decision. The CFFO acknowledged that, as a result of the May 23 Decision, it could not treat all of those persons as members for the purposes of this application.

Farm Business Registrants

With respect to the 266 farm business registrants, the CFFO solicited those memberships after the May 23 Decision. The CFFO filed documentation with the Tribunal confirming that each of those members submitted a written application for membership, which was accepted by the CFFO. This acceptance was communicated to the applicants by means of a letter from the CFFO, a sample of which was filed with the Tribunal. Each of the applicants provided the CFFO with a fresh cheque, independent of the farm business registration process, in payment of the membership fee. As those payments were not made under section 21 of the Act, section 21(10) of the Act does not apply, and there is no need for an explicit membership agreement.

The Tribunal finds that these farm business registrants are members within the meaning of the legislation. As there is no need for an explicit membership agreement, the CFFO only has to demonstrate that these members belong to the CFFO in accordance with the CFFO’s membership criteria and procedures. The Tribunal is satisfied that each of these members has met the membership criteria set out in the CFFO’s by-laws and has been admitted into membership in accordance with the CFFO’s membership procedures.

The CFFO filed documentation with the Tribunal confirming that each of the 266 farm business registrants has a valid FBR Number. Based on this evidence, the Tribunal is satisfied that each of these farm business registrants carries on a farming business in Ontario. The CFFO also filed documentation confirming that each of these farm business registrants has paid the CFFO’s membership fee.

Personal Members

With respect to the 35 personal members claimed by the CFFO, the CFFO filed copies of the application forms submitted by those members. These application forms require the applicant to sign a statement confirming the applicant’s agreement with the basis and purpose of the CFFO. As a result, all personal members are signed members. The application form also requires the applicant to enclose a cheque with the application in payment of the membership fee. Upon acceptance of the application, the CFFO sends the applicant a membership card confirming that the person has been accepted as a member of the CFFO.

The Tribunal is satisfied that these personal members are members within the meaning of the legislation. As these members do not make a payment to CFFO under section 21 of the Act, there is no need for an explicit membership agreement. The Tribunal is satisfied that these members have met the membership criteria set out in the CFFO’s by-laws and have been admitted into membership in accordance with the CFFO’s membership procedures.

The CFFO filed documentation confirming that 30 of the 35 personal members carry on a farming business in Ontario. The other 5 members are not known to be actively farming, either because they are retired or because the CFFO has no information in its records as to whether they are actively farming. The CFFO also filed documentation confirming that each of the personal members has paid the application fee.

Based on the evidence provided by the CFFO, the Tribunal is satisfied that the CFFO has 296 members (all 266 farm business registrants and 30 of 35 personal members) who carry on a farming business in Ontario and have paid the membership fee. Accordingly, the criterion set out in section 5(1)1 of the Act has been met.

5(1)2. The majority of the members of the farm organization carry on a farming business for which there is a current farming business registration.

The CFFO provided evidence that 266 of its 301 members carry on a farming business for which there is a current farming business registration. This represents 88% of the CFFO’s members. This criterion has therefore been met.

5(1)3. It has an annual membership fee, including applicable taxes, of at least $195 for each member.

The CFFO provided evidence that it has an annual membership fee for all members of $195 plus HST. This criterion has therefore been met.

5(1)4. It is incorporated under a general or special Act of the Legislature.

The CFFO filed a copy of its letters patent dated June 26, 1991, confirming that the CFFO was incorporated under the Corporations Act, R.S.O. 1990, c. C.38, which is a general act of the legislature. This criterion has therefore been met.

5(1)5. Its purpose is to represent persons carrying on farming businesses.

5(2) A farm organization does not meet the criterion prescribed in paragraph 5 of subsection (1) if it represents only persons carrying on a farming business in which only certain crops, livestock or poultry are raised or in which only certain agricultural products are produced.

The CFFO’s letters patent provide that one of the CFFO’s objects is “[t]o organize those farmers who wish to contribute to the solution of the problems of our society in a Christian spirit.” The CFFO’s Bylaw No. 1 provides that the CFFO’s purpose includes:

1. Organizing those farmers who agree with our basis and purpose;

2. Presenting the Christian voice with respect to farming to other farmers’ organizations;

3. Presenting the Christian voice on matters pertaining to agriculture, to government and to government-established committees and commissions;

4. Presenting the same voice to the public at large via all means of communication; and

5. Co-operating with other organizations who strive for similar goals by lawful means, provided we do not compromise our principles in so doing.

Based on the above evidence, the Tribunal is satisfied that the CFFO’s purpose is to represent persons carrying on farming businesses as required by section 5(1)5 of the Regulation.

The CFFO provided evidence that it represents some 40 or more agricultural commodities in Ontario, which satisfies the requirements of section 5(2) of the Regulation.

The Tribunal finds that this criterion has been met.

5(1)6. It provides education or training in respect of agricultural matters.

The CFFO provided the Tribunal with evidence of its education and training activities. These activities include, but are not limited to, operating standing committees to discuss issues of concern, providing speakers at the annual convention and at meetings of the district associations, offering educational seminars and workshops to members, operating business management clubs, providing leadership training to members, distributing various publications and discussion documents on issues of concern, and operating the CFFO’s website.

The Tribunal finds that this criterion has been met.

5(1)7. It has an executive body at the provincial level that is elected by its members or by electors chosen by members.

Section 5(1)7 of the Regulation requires a farm organization seeking accreditation to have in place, at the time of the application for accreditation, an executive body at the provincial level that is elected by its members or by electors chosen by members. This section protects the democratic rights of the members of an accredited farm organization to choose their own leaders. In accordance with the presumption of consistent expression, the word “members” has the same meaning in section 5(1)7 as it has elsewhere in the legislation. The executive body must therefore be elected by persons (or by electors chosen by persons) who belong to the farm organization in accordance with the farm organization’s membership criteria and procedures. Where a person makes a payment to a farm organization under section 21 of the Act, there must be an explicit membership agreement in place before those persons can be treated as members by the farm organization.

The Tribunal heard evidence that the CFFO has an executive board consisting of nine members: a president, two vice-presidents, a past president, and five directors. The current executive board was elected at the CFFO’s annual convention on November 14, 2011 (other than the two vice-presidents, who were acclaimed because there were only two candidates for those two positions). The CFFO uses a delegate system under which each district association chooses delegates to represent its interests at the annual convention. Although any member can attend the annual convention, only delegates have the right to vote for the executive board.

The Tribunal notes that the CFFO recently amended its by-laws to provide that the members of the executive board are “designated delegates.” This provision may conflict with section 5(1)7 of the Regulation, which requires all electors to be chosen by members. Arguably, a delegate who holds that position by virtue of the delegate’s office is not an elector chosen by the members. As it appears that this provision was not in force at the time of the last election in 2011, the Tribunal does not have to decide this issue now but raises it for further consideration by the CFFO.

The Tribunal heard evidence that, in the last election, all of the approximately 4,100 persons who were treated as members by the CFFO prior to the May 23 Decision were allowed to participate in the electoral process. Most of those persons had made a payment to the CFFO under section 21 of the Act but had not entered into explicit membership agreements with the CFFO. Accordingly, they were not members within the meaning of the legislation. As a result, the Tribunal is unable to conclude that the current executive board was elected by the CFFO’s members or by electors chosen by members, as required under section 5(1)7 of the Regulation. On the contrary, the evidence indicates that a great many persons who did not qualify as members were allowed to participate in the electoral process, which would have overwhelmed the democratic rights of the persons who did qualify as members to choose their executive body.

In its written submissions in response to the Interim Order, the CFFO argues that all of the persons treated as members by the CFFO for the 2011 elections were in fact members within the meaning of the legislation. The basis for this argument is that the CFFO was operating as an accredited farm organization in 2011, pursuant to a reaccreditation decision of the Tribunal in 2008 (the “2008 Decision”). The 2008 Decision did not raise the membership issue. The CFFO argues that the 2008 Decision “clearly allowed that CFFO membership consisted of FBR registrants and ‘personal members’ who filed payment with the CFFO as a general farm organization.” The CFFO submits that the Tribunal’s May 23 Decision did not have any retroactive effect and only affects the meaning of the word “member” on a go-forward basis. As a result, all of the persons treated as members by the CFFO for the 2011 elections were in fact members within the meaning of the legislation. The CFFO did not cite any authorities in support of its position.

There are a number of difficulties with the CFFO’s argument. First, the 2008 Decision did not address whether a person making a payment to a farm organization under section 21 of the Act could be a member within the meaning of the legislation, in the absence of an explicit membership agreement. All that the Tribunal said about membership in the 2008 Decision was that “CFFO has at least 250 members who carry on a farming business in Ontario, and have paid the membership fee.” Section 21(10) of the Act, and the effect of that section on farm business registrants, is not referred to anywhere in the 2008 Decision. There was no finding by the Tribunal that persons making a payment to the CFFO under section 21 of the Act could be members without an explicit membership agreement, notwithstanding section 21(10) of the Act.

Second, the 2008 Decision does not bind the Tribunal in this case, just as it did not bind the Tribunal in the May 23 Decision. It is apparent from the May 23 Decision that the Tribunal in that case had the benefit of extensive written submissions about the effect of section 21(10) of the Act on farm business registrants, not only from the CFFO and other accredited farm organizations but also from the Ministry and its agencies. It is equally apparent that the Tribunal in the 2008 Decision did not have the benefit of those submissions. In this case, the Tribunal has the benefit not only of previous Tribunal decisions but also of extensive written submissions from the CFFO and the Minister on how to interpret the word “member” in the applicable legislation. While the Tribunal agrees with the CFFO that the word “members” in section 5(1)7 of the Regulation refers to persons who were members at the time of the elections in 2011, the Tribunal does not agree that persons who made a payment to the CFFO under section 21 of the Act but did not have an explicit membership agreement with the CFFO at the time were members within the meaning of the legislation. It would be contrary to the presumption of consistent expression to find that, in section 5(1)7 of the Regulation and nowhere else, the word “members” includes persons who made a payment to the CFFO under section 21 of the Act but did not have an explicit membership agreement with the CFFO.

The Tribunal appreciates that the election in 2011 was held prior to the May 23 Decision and that the CFFO believed, in good faith, that persons making a payment to the CFFO under section 21 of the Act were members within the meaning of the legislation. The CFFO’s good faith is not in question. The difficulty posed by the legislation, however, is that the Tribunal has no discretion to accredit the CFFO on the basis of good faith, in the absence of a finding that all of the legislative requirements have been met. In addition, the Tribunal has not been provided with any legal authority for the CFFO’s position that the farm business registrants were members in 2011 as a result of the 2008 Decision.

The Tribunal notes that the membership issue raised in the May 23 Decision has been raised by the Tribunal in the past. In its reaccreditation decision of May 14, 1999, with respect to the Ontario Federation of Agriculture (the “OFA”), the Tribunal specifically raised a concern that the OFA’s membership procedures with respect to farm business registrants violated section 21(10) of the Act. A copy of that decision was sent to the CFFO.

More recently, the Tribunal raised the membership issue in a decision dated May 7, 2010, denying McCrae Farms Ltd. a religious exemption under section 22 of the Act. The Tribunal served notice of that application on the CFFO and the other farm organizations that were accredited at the time. In its decision, the Tribunal noted that “the Act clearly states that payment to an accredited farm organization does not confer membership in that organization [subsection 21(10)].” The Tribunal went on to warn that “any accredited farm organization that leads payees to believe otherwise is not operating in accordance with the Act.” A copy of that decision was also sent to the CFFO.

It is unclear why the Tribunal’s warning in the McCrae decision went unheeded. In any event, the CFFO had notice of the Tribunal’s concerns about membership more than a year before the reaccreditation hearing in 2011 that resulted in the May 23 Decision.

For all of the above reasons, the Tribunal finds that this criterion has not been met.

5(1)8. It has an established process whereby individual members have the right to make submissions on relevant issues of concern and the executive body has the duty to consider the submissions and respond.

Section 5(1)8 of the Regulation requires a farm organization to put into place a process that meets two conditions: (1) it grants individual members the right to make submissions on relevant issues of concern, and (2) it imposes a duty on the executive body to consider those submissions and respond to them. Although section 5(1)8 does not specifically require this process to be set out in writing, it would be prudent for a farm organization seeking accreditation to have a written policy that formally establishes the process required by section 5(1)(8).

With respect to the first condition, the CFFO provided evidence to the Tribunal that individual members have the right to make submissions on issues of concern at the district association level. Under article I.D.3 of the CFFO’s Bylaw No. 2, the district association’s delegates have a duty to report on those issues of concern to the CFFO’s provincial council, which includes the executive board. In addition, article II.D.1.d. of Bylaw No. 2 provides that members may present motions directly to the provincial council for consideration, which again includes the executive board. Similarly, article IV.D.1.e. of Bylaw No. 2 provides that members may present motions for consideration at the CFFO’s annual convention, where the executive board is elected and where, presumably, the members of the executive board would be in attendance. It is important for a member’s submissions to reach the executive board because, under section 5(1)8 of the Regulation, the executive board has the duty to consider the member’s submissions and to respond to them. Based on the above evidence, the Tribunal is satisfied that there is an established process under which individual members have the right to make submissions on relevant issues of concern, which meets the first condition under section 5(1)8 of the Regulation.

With respect to the second condition, the Tribunal could find no direct evidence that the executive board has a duty to consider an individual member’s submissions and to respond to them. In the absence of such a duty, there is a concern that, while a member may have the right to make submissions, those submissions could be ignored rather than receiving the consideration and response required by section 5(1)8 of the Regulation. While the Tribunal does not doubt the good faith of the executive board, the Tribunal is not satisfied on the evidence before it that there is an established process under which the executive board has a duty to consider an individual member’s submissions and to respond to them. Accordingly, the second condition under section 5(1)8 of the Regulation has not been met.

As a result, the Tribunal finds that this criterion has not been met.

5(1)9. It provides advice and analysis to governments, administrative tribunals or advisory bodies concerning agricultural issues and the development of programs or policies that are of interest to persons carrying on farming businesses.

The CFFO provided evidence that it actively provides advice and analysis to governments and others on a diverse number of issues of interest to Ontario farmers. The CFFO filed with the Tribunal a number of documents it has issued in the recent past on such diverse topics as green energy, animal welfare, the provincial budget, water management, agriculture-wildlife conflicts, international trade, the Aggregate Resources Act, R.S.O. 1990, c. A.8, risk management, food labeling, environmental issues, land use planning, and farm debt.

The Tribunal finds that this criterion has been met.

5(1)11. It has at least twelve local affiliates each of which represents members carrying on farming businesses in a different area of Ontario.

5(4) A farm organization does not meet the criterion prescribed in paragraph 11 of subsection 1 unless each local affiliate,

(a) has at least ten members, each of whom has paid the membership fee, carrying on farming businesses in the area concerned;

(b) has a local affiliate executive elected by the affiliate’s members;

(c) has an annual general meeting; and

(d) is entitled to send a representative to any meeting of the farm organization to which representatives of local affiliates are invited.

The CFFO submitted that it has 14 local affiliates (known as “district associations”) that meet the requirements of sections 5(1)11 and 5(4) of the Regulation (this number is a subset of the 21 district associations that belong to the CFFO). In support of its submission, the CFFO provided the Tribunal with a table setting out the 14 district associations that have at least ten members who have paid the membership fee and who carry on farming businesses in each of those districts. These members are drawn from the persons who qualify as members within the meaning of the legislation, as discussed under section 5(1)1 above. The table also indicates that each of these 14 district associations has an elected executive, holds an annual general meeting, and is entitled to send a representative to CFFO meetings to which representatives of the district associations are invited.

There are two difficulties with the CFFO’s submission. First, all of the district associations listed in the CFFO’s table held their most recent annual general meetings prior to the May 23 Decision. At those annual general meetings, persons making a payment to the CFFO under section 21 of the Act were treated as members, in the absence of an explicit membership agreement, and were allowed to vote. As a result, the local executives of those district associations were almost certainly elected, at least in part, by persons who did not qualify as members within the meaning of the legislation, contrary to section 5(4)(b) of the Regulation.

Second, the evidence demonstrates that, in a number of the 14 district associations claimed by the CFFO, one or more members of the local executives of those district associations do not qualify as members under the legislation. In Dufferin-Wellington, the president of the local executive does not appear on the CFFO’s membership list. In Elgin, three directors do not appear on the CFFO’s membership list. In Middlesex, the acting president and three directors do not appear on the CFFO’s membership list. In Oxford, the treasurer does not appear on the CFFO’s membership list (neither does the president, although another member with a similar name is listed, so the evidence is inconclusive). In Quinte, the secretary does not appear on the CFFO’s membership list (neither do the vice-president and a director, although other members with similar names are listed, so the evidence is inconclusive). In Renfrew-Lanark, the vice-president, the secretary/treasurer, and a director do not appear on the CFFO’s membership list. In Simcoe, one director does not appear on the CFFO’s membership list. In St. Lawrence-Ottawa Valley, the treasurer and a director do not appear on the CFFO’s membership list. In Thunder Bay, the president and one director do not appear on the CFFO’s membership list (neither do the secretary and two other directors, although other members with similar names are listed, so the evidence is inconclusive). In Wellington, two directors do not appear on the CFFO’s membership list. Finally, in Wentworth-Brant, the president and a director do not appear on the CFFO’s membership list.

Although the legislation does not specifically state that the members of a local executive must be members of the farm organization, it is at least implicit in the concept of a local executive that acts as a board of directors for the district association that the members of the local executive are drawn from the local members of the farm organization. The Tribunal notes that article V.10 of the CFFO’s Bylaw No. 1 provides that “[m]embership grants the right to . . . be elected to a District Association Board. . . .” Similarly, article I.C.3 of the CFFO’s Bylaw No. 2 provides, under the heading “Election of Board Members for District Associations,” that “[e]very District Association member . . . is eligible for nomination.” These provisions indicate that, under the CFFO’s by-laws, eligibility to become a member of a local executive is restricted to members of the CFFO. As indicated in the preceding paragraph, a number of the CFFO’s district associations are not in compliance with the CFFO’s by-laws, although the Tribunal accepts that, at the time, those district associations believed in good faith that they were in compliance.

Based on the above deficiencies, the Tribunal finds that the CFFO does not have any local affiliates that meet the requirements of sections 5(1)11 and 5(4) of the Regulation, and this criterion therefore has not been met.

5(1)12. It contributes to the local affiliates referred to in paragraph 11 an amount that equals or exceeds 25 per cent of,

i. in the case of a farm organization that is not accredited, the amount that is obtained when the number of members it had in the most recent completed fiscal year before the day in which application for accreditation is made is multiplied by $195 less the amount that would be payable in taxes if this amount were being charged as a membership fee . . .

The CFFO’s most recent completed fiscal year prior to the hearing was the year ended December 31, 2011. In that fiscal year, the CFFO had 35 personal members who were members within the meaning of the legislation. The revenues from those 35 memberships totaled $6,825, while the CFFO recorded direct contributions to its local affiliates of $8,040, which is 117.8% of the revenue number.

There are two difficulties with the CFFO’s approach to section 5(1)12 of the Regulation. First, in calculating its contributions to local affiliates, the CFFO counted all of its district associations as local affiliates, without regard to whether those district associations met the requirements of sections 5(1)11 and 5(4) of the Regulation in 2011. There is no evidence that the CFFO had any qualifying local affiliates in 2011, nor is this likely, given the lack of explicit membership agreements in 2011. If there were no qualifying local affiliates in 2011, then it is not possible to carry out the calculations required by section 5(1)12.i of the Regulation, and the criterion cannot be met.

Second, the Tribunal notes that the CFFO, in carrying out its calculations, has ignored the plain wording of section 5(1)12.i, which requires the HST to be backed out of the $195 membership fee in arriving at the revenue number. The section specifically states that the number of members is to be multiplied by “$195 less the amount that would be payable in taxes if this amount were being charged as a membership fee.” Assuming HST of 13%, the correct amount for the revenue calculation is $172.57, since $22.43 of a $195, tax-inclusive membership fee would be attributable to HST. The Tribunal appreciates that the CFFO adds HST to its $195 membership fee, but section 5(1)12.i assumes a tax-inclusive membership fee of $195 in parallel with section 5(1)3 of the Regulation, regardless of the actual membership fee charged or tax treatment given by a farm organization. Although using the $172.57 number would increase the CFFO’s percentages (assuming that they could be meaningfully calculated), it is important to follow the plain wording of the legislation.

For all of the above reasons, the Tribunal finds that this criterion has not been met.

5(1)10. If it is an unaccredited organization, it has submitted to the Tribunal audited financial statements for its most recent completed fiscal year and the auditor’s report on those financial statements.

5(3) A farm organization does not meet the criteria prescribed in paragraphs 10 and 13 of subsection (1) unless,

(a) the financial statements include a balance sheet, a statement of members’ equity, a statement of revenues and expenses and a statement of changes in financial position, however those statements are entitled;

(b) the financial statements and auditor’s report are prepared in accordance with the standards set forth in the Handbook of the Canadian Institute of Chartered Accountants; and

(c) the financial statements show the amount received under subsection 21 (3) of the Act and the number of refunds made by the organization under subsection 21 (8) of the Act during the fiscal year and the per cent of the applicable amounts received under paragraph 12 of subsection (1) that the organization has contributed to branches referred to in paragraph 11 of subsection (1) during the fiscal year.

The CFFO filed its audited financial statements with the Tribunal for the fiscal year ended December 31, 2011, which was the most recent completed fiscal year prior to the hearing. At the hearing, the Tribunal asked for additional information with respect to the CFFO’s financial statements. In response, the CFFO filed amended financial statements with the Tribunal after the hearing. Those financial statements include an auditor’s report from David M. den Boer, Chartered Accountant, dated July 23, 2012.

In accordance with section 5(3)(a) of the Regulation, the financial statements include (sometimes under different names) a balance sheet, a statement of members’ equity, a statement of revenues and expenses, and a statement of changes in financial position.

With respect to section 5(3)(b) of the Regulation, the financial statements provide in note 10:

As indicated in the Independent Auditor’s Report, these financial statements have been prepared in accordance with Canadian generally accepted accounting standards and the audit was conducted in accordance with Canadian generally accepted auditing standards. These standards are in compliance with the Handbook of the Canadian Institute of Chartered Accountants.

Based on this note, the Tribunal is satisfied that the requirements of section 5(3)(b) of the Regulation have been met.

With respect to section 5(3)(c) of the Regulation, the CFFO’s financial statements show that the amount received under section 21(3) of the Act in 2011 was $865,995. There were 387 refunds under section 21(8) of the Act, totaling $75,465. Although the financial statements show percentages of certain revenues that were contributed to district associations in 2011, the HST was not backed out of the revenue amounts as required by section 5(1)12.i of the Regulation. In addition, in the absence of evidence that the CFFO had local affiliates in 2011 within the meaning of sections 5(1)11 and 5(4) of the Regulation, it is not possible to carry out the calculations required by section 5(1)12 of the Regulation, and the percentages set out in the CFFO’s financial statements are therefore not meaningful for the purposes of accreditation under the Act. Until the CFFO can show meaningful percentages in its financial statements, based on revenue numbers that are calculated in accordance with section 5(1)12.i of the Regulation, this criterion cannot be met.

5(1)14. It has entered into, or agreed to enter into, an agreement with the Minister and the accredited farm organizations to provide special funding to the francophone organization that is eligible for special funding under section 12 or 13 of the Act.

The CFFO is a party to an agreement with the Minister and other farm organizations to provide special funding to L’Union des Cultivateurs Franco-Ontariens (the “UCFO”), a francophone organization that is eligible for special funding under the Act. The Agreement was signed by the parties in late 2007 and early 2008 and is, by its terms, effective as of January 1, 2008. The Agreement requires the CFFO and the other accredited farm organizations in Ontario to pay certain amounts to the UCFO to assist in funding the UCFO’s operations.

As a result of the May 23 Decision, and similar decisions rendered on that date with respect to other accredited farm organizations, there currently are no accredited farm organizations in Ontario. This raises an issue as to whether the CFFO is still a party to the Agreement for the purposes of section 5(1)(14) of the Regulation.

The Agreement provides in section 2 that it will terminate only under one of three circumstances: (1) the Tribunal removes the eligibility of the UCFO for special funding under the Act, (2) all parties to the Agreement, including the UCFO, mutually agree to terminate the Agreement, or (3) the UCFO is granted accreditation by the Tribunal. In addition, the Agreement provides in section 6(a) that if the CFFO or one of the other accredited farm organizations loses its accreditation, the Agreement continues. Section 7 provides that the obligations of an accredited farm organization terminate on the date that a farm organization loses its accreditation, but the section goes on to provide that the farm organization has a continuing obligation to pay any amounts owing under the Agreement as of the termination date. Significantly, section 7 does not terminate the Agreement when accreditation is lost, nor does it suggest that a farm organization that loses its accreditation is no longer a party to the Agreement.

There is nothing in the evidence before the Tribunal to suggest that any of the three circumstances cited above that would terminate the Agreement has occurred. In addition, sections 6(a) and 7 strongly suggest that the Agreement continues in force, and that the CFFO remains a party to the Agreement, even if the CFFO’s obligations under the Agreement terminated with the May 23 Decision (subject to the CFFO’s continuing obligation to make any amounts owing under the Agreement as of the termination date).

Based on the above analysis, and without in any way adjudicating upon the contractual rights between the parties to the Agreement, the Tribunal is satisfied that the CFFO remains a party to the Agreement and therefore the requirements of section 5(1)14 of the Regulation have been met.

Conclusion

For all of the above reasons, the Tribunal finds that the CFFO does not meet the legislative requirements for accreditation at this time. Although the Tribunal acknowledges the important role played by the CFFO in the Ontario agriculture industry, the Tribunal has no discretion under the legislation to accredit the CFFO once the Tribunal finds, as it has in this case, that even one of the legislative requirements has not been met. The Tribunal appreciates that this decision may create hardship for the CFFO, and also potentially for the UCFO, but the Tribunal does not have any jurisdiction to relieve against hardship under the legislation.

Most of the difficulties encountered by the CFFO on this application for accreditation arise from the CFFO’s inability to treat persons making a payment to the CFFO under section 21 of the Act as members for the 2011 fiscal year. The Tribunal has also identified deficiencies for which changes to the CFFO’s by-laws, policies, and procedures may be required. It could take some time for the CFFO to remedy the deficiencies identified in this decision in order to meet the legislative requirements for accreditation. If the Tribunal had the jurisdiction to do so, it would provisionally accredit the CFFO for a period of three years, commencing on the date of this decision, to allow the CFFO to make the necessary changes and then apply for reaccreditation. Unfortunately, the Tribunal does not have that jurisdiction, and is therefore required under the existing legislation to dismiss the CFFO’s application.

Order

The Tribunal orders that the CFFO’s application for accreditation is dismissed. This order is without prejudice to the CFFO’s right to make a fresh application in the future if it chooses to do so.

Dated at Hamilton, Ontario, this 7^th day of November, 2012