Ontario Federation of Agriculture Accreditation (Re), 2012 ONAFRAAT 33

Agriculture, Food and Rural Affairs Appeal Tribunal

Tribunal d’appel de l’agriculture, de l’alimentation et des affaires rurales

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

APPEAL: Ontario Federation of Agriculture Accreditation

OFA Accreditation (RE) 2012 ONAFRAAT 33

STATUTE: Farm Registration and Farm Organizations Funding Act, 1993

HEARING: July 20, 2012

DATE OF DECISION: November 14, 2012

2012-33

NEUTRAL CITATION: 2012 ONAFRAAT 33

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 Ontario Federation of Agriculture (OFA) for accreditation under Subsection 4(1) of the Act.

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

Appearances:

Neil Currie, General Manager, OFA Lori Perkes, Director, Finance and Human Resources, OFA Jason Bent, Manager, Farm Policy Research Group, OFA Mark Wales, President, OFA

DECISION OF THE TRIBUNAL

Background

This matter was heard by the Agriculture, Food and Rural Affairs Appeal Tribunal (the “Tribunal”) on July 20, 2012, in the Tribunal Boardroom, Guelph, Ontario. The Ontario Federation of Agriculture (the “OFA”) 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 OFA 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 OFA 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 OFA’s application should be granted, nor was he asked to do so.

The Issue

The sole issue on this application is whether the OFA 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 OFA, those transfers are in the millions of dollars annually. 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 OFA, 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 OFA 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 OFA’s application that the OFA 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 OFA 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 OFA, 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 OFA’s Application

In order to be accredited as a farm organization, the OFA must satisfy all of the applicable criteria set out in section 5 of the Regulation. The OFA 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 OFA has four categories of members: (1) registered farming business members, (2) individual farm members, (3) agricultural/commodity organization members, and (4) associate members. For the purposes of this application, the OFA presented evidence that it has 2,196 members, consisting of 1,211 registered farming business members, 842 individual members, and 143 associate members.

The Tribunal made an oral confidentiality order with respect to certain documents filed with the Tribunal. The order extends to all of the documents at tab 2 of exhibit 1.

Registered Farming Business Members

With respect to the 1,211 registered farming business members claimed by the OFA, this number is a small subset of the approximately 36,000 farm business registrants who paid the prescribed amount to the OFA in 2012 and did not request a refund within the time prescribed under the legislation. Those farm business registrants had previously been treated by the OFA as registered farming business members, in the absence of an explicit membership agreement.

Neil Currie, General Manager of the OFA, testified that after the May 23 Decision was released, the OFA met with its legal counsel to try to find a way to convert a payment under the Act into a membership fee under the Regulation. As a result of that process, the OFA solicited memberships from farm business registrants who had made a payment to the OFA under section 21 of the Act and had not requested a refund. Those farm business registrants were asked to send the OFA a form letter requesting a refund of their farm business registration payments and the application of the refunded amount to the OFA’s membership fee. 1,211 farm business registrants responded by sending in the letter, and the OFA provided the Tribunal with a sample of those letters. The Tribunal accepts that this sample is representative of the whole, and that these letters constitute an application for membership in the OFA. These membership applications were accepted by the OFA’s board of directors on July 5, 2012. No actual funds changed hands, but the requests were recorded internally in consultation with the OFA’s auditors.

The Tribunal notes that the letters requesting a refund were sent after the prescribed period to apply for a refund under section 21(7) of the Act. The Tribunal agrees with the OFA, however, that sections 21(7) and 21(8) of the Act establish the timelines under which a farm organization is required to give a refund but do not prohibit a farm organization from making a voluntary refund after the deadline has passed.

The Tribunal finds that the effect of these letters is to take the payment of the membership fee for these 1,211 farm business registrants out of section 21 of the Act, while allowing them to retain their FBR Numbers. Once a request for a refund is granted, the person requesting the refund is free to do with the refunded amount whatever that person wishes. By asking that the refunded amount be applied to the OFA’s membership fee, the person is making a payment outside section 21 of the Act to replace the payment that was originally made under section 21 of the Act. As a result, there is no need for an explicit membership agreement, and the OFA only has to demonstrate that these farm business registrants belong to the OFA in accordance with the OFA’s membership criteria and procedures.

Those membership criteria and procedures are set out, in part, in Article 5.3.1 of the OFA’s By-Law 12-1:

5.3.1 A farming business that designates OFA by directing the annual registration payment to OFA in accordance with the Act and stipulates that this payment constitutes a request for membership, shall be considered a Registered Farming Business Member of OFA subject to qualifying for membership per the membership criteria established by the Board from time to time. The OFA will subsequently verify acceptance of the membership.

The Tribunal is not persuaded that the 1,211 registered farming business members claimed by the OFA belong to the OFA in accordance with the membership criteria and procedures set out above. While those persons “designated” the OFA during the farm business registration process, they did not go on to stipulate that their payments under section 21 of the Act constituted a request for membership. Instead, they first requested a refund of their payments, and then stipulated that the refunded amount be applied to the OFA’s membership fee, which, as noted earlier, takes the payment out of section 21 of the Act. In addition, article 5.3.1 provides that a request for membership is “subject to qualifying for membership per the membership criteria established by the Board from time to time.” It is unclear from the evidence before the Tribunal what those membership criteria are or whether the 1,211 registered farming business members claimed by the OFA met those criteria. Finally, article 5.3.1 provides that “[t]he OFA will subsequently verify acceptance of the membership.” This language is vague and does not indicate what further steps are required under the by-law to verify acceptance of a membership. Regardless of the intended meaning, the Tribunal is unable to find any evidence that any verification occurred with respect to the 1,211 applications for membership relied upon by the OFA. Given these deficiencies in meeting the requirements of the OFA’s by-laws, the Tribunal is not prepared to find that the 1,211 registered farming business members claimed by the OFA are members within the meaning of the legislation.

Although not necessary to decide this application, the Tribunal has a concern about the potential future application of article 5.3.1 to farm business registrants. On its face, article 5.3.1 allows a person making a payment to the OFA under section 21 of the Act to be treated as a member upon making the payment, requesting membership, and meeting the board’s criteria for membership, in the absence of an explicit membership agreement. Although article 5.3.1 contemplates that the OFA will “subsequently verify acceptance of the membership” (which, as noted earlier, is vague as to what further steps will be taken), the person making the payment is treated as a member under the by-law before the application for membership has been accepted and before there has been any communication of acceptance to the applicant. It would be prudent for the OFA to review its by-laws to ensure that persons making a payment to the OFA under section 21 of the Act are not treated as members until there is an explicit membership agreement in place 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.

The Tribunal has a similar concern about article 5.3.2 of By-Law 12-1, which provides that “[t]he annual farming business registration and payment of the prescribed fee to the OFA, under the Act constitutes a renewal of the membership of that Registered Farming Business Member.” This provision allows a person making a payment under section 21 of the Act who is already a member of the OFA to be treated as a member for the coming year, in the absence of an explicit membership agreement (i.e., there is no explicit application for membership in the coming year, no explicit acceptance of that request, and no explicit communication of that acceptance to the applicant). Article 5.3.2 could violate section 21(10) of the Act if, for example, a person who is already a member made a payment to the OFA under section 21 of the Act but did not wish to renew that person’s membership for the coming year. Although the Tribunal does not need to decide this issue now, it would be prudent for the OFA to review this issue and to make any needed changes to its by-laws.

Individual Farm Members

The OFA’s by-laws provide that individual farm members are persons who are or have been directly involved in farming and subscribe to the objectives of the OFA. Individual farm members request membership in the OFA on an annual basis. The OFA provided the Tribunal with a copy of its application form for individual farm members, which provides, in part, that “[p]racticing farmers and retired farmers still living on a farm are eligible to be Individual Farm Members.” If the application is accepted, the OFA sends the applicant a welcome package and a membership card.

The Tribunal is satisfied that the 842 individual farm members claimed by the OFA are members within the meaning of the legislation. As these members do not make a payment to the OFA 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 OFA’s by-laws and have been admitted into membership in accordance with the OFA’s membership procedures.

The difficulty with using these members to satisfy the criteria set out in section 5(1)1 of the Regulation is that there is no evidence before the Tribunal as to how many of the 842 individual farm members, if any, carry on a farming business in Ontario as required by that section. It appears from the evidence that some of the individual farm members are actively farming and that some are retired. In the absence of a breakdown as to how many of these members actually carry on a farming business in Ontario, the Tribunal is unable to find that these members meet the requirements of section 5(1)1 of the Regulation.

Agricultural/Commodity Organization Members

The OFA’s by-laws provide that agricultural/commodity organizations may apply to become members of the OFA, subject to any conditions that the OFA’s board of directors may impose upon those memberships. The OFA presented evidence that it has 25 agricultural/commodity organization members, representing a wide variety of agricultural commodities. Agricultural/commodity members do not have the right to vote.

The Tribunal is satisfied that the 25 agricultural/commodity members claimed by the OFA are members within the meaning of the legislation. As these members do not make a payment to the OFA 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 OFA’s by-laws and have been admitted into membership in accordance with the OFA’s membership procedures.

The OFA did not rely upon its agricultural/commodity organization members in attempting to meet the requirements of section 5(1)1 of the Regulation. Given that section 5(1)1 sets out a minimum requirement, the OFA is free to use any category of members it chooses to satisfy the 250-member requirement. As the agricultural/commodity organization members do not appear to carry on a farming business in Ontario, they probably would not have met the requirements of section 5(1)1 of the Regulation, had the OFA chosen to include them.

Associate Members

The OFA’s by-laws provide that persons who are not required to register under the Act and do not meet the membership criteria to become an individual farm member or an agricultural/commodity organization member, but who support the objectives of the OFA, may apply to become associate members of the OFA. Associate members request membership in the OFA on an annual basis. Associate members do not have the right to vote.

The Tribunal is satisfied that the 143 associate members claimed by the OFA are members within the meaning of the legislation. As these members do not make a payment to the OFA 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 OFA’s by-laws and have been admitted into membership in accordance with the OFA’s membership procedures.

The difficulty with using these members to satisfy the criteria set out in section 5(1)1 of the Regulation is that they do not carry on a farming business in Ontario as required by that section. The Tribunal heard evidence that the OFA’s associate members consist of businesses that offer services to farmers but do not farm, such as hardware stores, local farm cooperatives, and farm machinery dealers. These types of businesses, while farm-related, are not engaged in farming and therefore do not “carry on a farming business” within the meaning of section 5(1)1 of the Regulation.

Based on the above analysis, the Tribunal finds that the OFA has failed to demonstrate that it has 250 members, within the meaning of the legislation, who meet the requirements set out in section 5(1)1 of the Regulation. Accordingly, this criterion has not 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 OFA provided evidence that the 1,211 registered farming business members claimed by the OFA make up 55.2 percent of the 2,196 members claimed by the OFA under section 5(1)1 of the Regulation. The OFA further provided evidence that all 1,211 registered farming business members have valid business registration numbers, which indicates that they have a current farming business registration as required under section 5(1)2 of the Regulation.

There are two difficulties with the OFA’s submission. First, as noted above, the Tribunal is unable to find that any of the registered farming business members claimed by the OFA are members within the meaning of the legislation. Accordingly, those persons cannot be used to satisfy section 5(1)2 of the Regulation.

Second, the failure of the OFA to include the agricultural/commodity organization members in its calculation violates the presumption of consistent expression. Section 5(1)2 of the Regulation refers simply to “members,” and that word must therefore carry the same meaning in section 5(1)2 as it does throughout the applicable legislation. As noted earlier, a “member” for the purposes of the legislation is a person who belongs to a farm organization in accordance with the farm organization’s membership criteria and procedures (with the added requirement of an explicit membership agreement for persons making a payment to the farm organization under section 21 of the Act). Section 5(1)2 does not distinguish between different categories of members and therefore requires all members of a farm organization to be included in the calculation required under section 5(1)2. It is not open to the OFA to attempt to satisfy this requirement by using only a subset of its members. As the agricultural/commodity organization members have not been counted in the OFA’s submission, the 55.2% number claimed by the OFA cannot be relied upon in determining whether section 5(1)2 of the Regulation has been satisfied.

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

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

The OFA provided evidence that registered farming business members, individual farm members, and associate members have an annual membership fee of $195 plus HST, while agricultural/commodity organization members have an annual membership fee of $500 plus HST. This criterion has therefore been met.

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

The OFA filed a copy of its letters patent dated August 23, 1956, confirming that the OFA was incorporated under the Corporations Act, 1953, S.O. 1953, c. 19, which is a general act of the legislature and a predecessor to the current Corporations Act, R.S.O. 1990, c. C.38. 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 OFA’s letters patent provide that one of the OFA’s objects is “[to] co-ordinate the efforts of the different branches of agriculture throughout Ontario for the purpose of promoting their common interest through collective action.” The OFA’s letterhead states that “[t]he Ontario Federation of Agriculture enables prosperous and sustainable farms.” Based on this evidence, the Tribunal is satisfied that the OFA’s purpose is to represent persons carrying on farming businesses as required by section 5(1)5 of the Regulation.

The Tribunal heard evidence that the OFA represents all 200 or so 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 OFA provided the Tribunal with evidence of its education and training activities. These activities include, but are not limited to, providing training to agricultural organizations and potential agricultural leaders, partnering with government and other organizations to deliver agricultural education and training, and publishing fact sheets on a broad range of topics of interest to farmers.

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 that person can be treated as a member by the farm organization.

The term “executive body” is not defined in the legislation, which suggests that the ordinary meaning was intended to apply. In the context of an organization, the word “executive” usually refers to someone at the most senior levels of the organization who is responsible for the direction and control of the organization. The word “body” usually refers to a group of individuals who are organized into a functional unit for a particular purpose. Putting these two words and meanings together, the Tribunal finds that, for the purposes of the legislation, an executive body is a group of individuals at the most senior levels of a farm organization who are responsible for the direction and control of the organization.

The OFA has two organizational units that could qualify as an executive body under the legislation: a board of directors and an executive committee. Section 6.1 of the OFA’s By-Law 12-1 provides that “[t]he affairs of the OFA shall be managed by a Board of Directors consisting of up to eighteen (18) persons.” With respect to the executive committee, section 14.1 of By-Law 12-1 provides that “[t]he Executive Committee shall consist of four members, being the President, the two Vice-Presidents, and a fourth member, elected by the Board from among its members.” As the president and vice-presidents are also members of the board (pursuant to section 12.1 of By-Law 12-1), it appears that the executive committee functions as a subset of the board on issues for which the full board’s participation is not required. The only mention of the executive committee’s powers in By-Law 12-1 is in section 14.6, which provides that “[t]he Board may delegate to the Executive Committee any and all of its powers, subject to restrictions, if any, contained in this By-Law or imposed from time to time by the Board.” This mirrors the wording of section 70 of the Corporations Act, which provides that “[w]here the number of directors on the board of directors of a company is more than six, the directors may pass a by-law authorizing them to elect from among their number an executive committee consisting of not fewer than three and to delegate to the executive committee any powers of the board, subject to the restrictions, if any, contained in the by-law or imposed from time to time by the directors.” In addition to the general power to delegate to the executive committee, the board has the power under section 12.9 of By-Law 12-1 to “vary, add to, or limit the powers and duties of any officer or officers,” which includes the president and the two vice-presidents who sit on the executive committee.

It appears from this review of the OFA’s executive structure that the ultimate responsibility for the direction and control of the OFA lies with the board of directors and not with the executive committee. This is so because the executive committee derives its powers from the board, and the board has the ability to restrict those powers from time to time in accordance with section 14.6 of By-Law 12-1. In addition, the board has the ability to restrict the powers and duties of the officers who sit on the executive committee. Although the executive committee may have certain responsibilities delegated to it by the board, it is clear that the board has ultimate responsibility for the direction and control of the OFA. This is consistent with general principles of corporate law, under which the board of directors has ultimate control over the officers and the affairs of the corporation. The Tribunal therefore finds that, for the purposes of this hearing, the OFA’s board of directors is the executive body referred to in section 5(1)7 of the Regulation.

The Tribunal heard evidence that the OFA elects one third of its board of directors annually and that, prior to the hearing, the most recent elections were in the fall of 2011. Some of the directors are elected by a specific geographic zone, whereas other directors are elected by the membership at large. All directors are elected by members rather than by electors chosen by members. For the purposes of section 5(1)7 of the Regulation, the OFA defined “member” to mean registered farming business members and individual farm members. The OFA did not include associate members and agricultural/commodity organization members in its definition of “member” for this section, presumably because those members do not have voting rights within the OFA’s membership structure.

There are a number of difficulties with the OFA’s approach to section 5(1)7 of the Regulation. First, it violates the presumption of consistent expression because the word “member” in section 5(1)7 is being used to describe a subset of the members of the OFA. By counting only members with voting rights (i.e., registered farming business members and individual farm members) and excluding members who do not have voting rights (i.e., associate members and agricultural/commodity organization members), the OFA is giving the word “member” a different meaning in section 5(1)7 than it has elsewhere in the legislation. As the Minister noted in his written submissions to the Tribunal in response to the Interim Order, “had Cabinet wanted different definitions for the word ‘member’ to exist in section 5 of [the Regulation], it could have done so.” The Tribunal agrees with this analysis. If Cabinet’s intention had been for section 5(1)7 to apply only to voting members, it would have been a simple matter to express that intention by providing that the executive body of a farm organization seeking accreditation be “elected by its members entitled to vote in elections or by electors chosen by such members.”

The Tribunal appreciates that some farm organizations, including the OFA, may wish to have non-voting members who contribute to the organization in various ways but do not have the rights and privileges of full voting members. The difficulty with this approach is that the legislation does not contemplate non-voting members, and having such members conflicts with section 5(1)7 of the Regulation. There is nothing to prevent a farm organization, however, from entering into mutually beneficial relationships with other individuals or organizations without granting them membership in the organization.

The second difficulty with the OFA’s approach is that all of the approximately 36,000 persons who were treated as registered farming business members by the OFA in 2011 were allowed to vote. Those persons had made a payment to the OFA under section 21 of the Act but had not entered into explicit membership agreements with the OFA. Accordingly, they were not members within the meaning of the legislation. As a result, the Tribunal is unable to conclude that the current board of directors was elected by the OFA’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 vote, 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 OFA argues that the persons treated as registered farming business members by the OFA for the 2011 elections were in fact members within the meaning of the legislation. The basis for this argument is that the OFA 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 OFA argues that the 2008 Decision “clearly allowed that OFA membership consisted of [individual farm members] and Associate members as well as the approximately 37,000 farm business entities who filed payment with the OFA as a general farm organization.” The OFA 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, the persons treated as registered farming business members by the OFA for the 2011 elections were in fact members within the meaning of the legislation. The OFA did not cite any authorities in support of its position.

There are a number of difficulties with the OFA’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 “[d]ocumentation provided by the OFA shows that there are 37,947 members carrying on a farm business in Ontario who 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 OFA 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 OFA 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 OFA and the Minister on how to interpret the word “member” in the applicable legislation. While the Tribunal agrees with the OFA 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 OFA under section 21 of the Act but did not have an explicit membership agreement with the OFA 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 OFA under section 21 of the Act but did not have an explicit membership agreement with the OFA.

The Tribunal appreciates that the elections in 2011 were held prior to the May 23 Decision and that the OFA believed, in good faith, that persons making a payment to the OFA under section 21 of the Act were members within the meaning of the legislation. The OFA’s good faith is not in question. The difficulty posed by the legislation, however, is that the Tribunal has no discretion to accredit the OFA 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 OFA’s position that the OFA’s 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, 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 OFA.

More recently, the Tribunal raised the membership issue in a decision dated May 7, 2010, denying McRae Farms Ltd. a religious exemption under section 22 of the Act. The Tribunal served notice of that application on the OFA 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 OFA.

It is unclear why the Tribunal’s warning in the McRae decision went unheeded. In any event, the OFA 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).

The OFA provided the Tribunal with its Resolution Policy and Procedures (the “Resolution Policy”), which was adopted by the OFA’s board of directors on October 27, 2011. Under the Resolution Policy, members may submit resolutions for consideration by the OFA’s board of directors. Although there is an initial vetting process under which the OFA’s General Manager and Policy Research Group Manager review the proposed resolution and, if appropriate, attempt to negotiate amendments with the member making the proposal, the Resolution Policy also provides that, regardless of the outcome of that process, the member proposing the Resolution has the option of raising the subject matter of the resolution with the board. The board will then consider and vote on the resolution, after which the member proposing the resolution is notified of the board’s decision.

Although the Resolution Policy appears to meet the two conditions set out in section 5(1)8 of the Regulation, the Tribunal heard evidence from Mr. Currie that the Resolution Policy does not apply to associate members. As section 5(1)8 does not distinguish between different categories of members, the exclusion of associate members from the Resolution Policy violates the presumption of consistent expression. This criterion therefore 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 OFA provided evidence that it actively lobbies and advises governments, public sector organizations, and private sector service providers on a diverse number of issues of interest to Ontario farmers. The OFA filed with the Tribunal a number of written submissions it has recently made to various government ministers and agencies on such diverse topics as the Ontario budget, the Aggregate Resources Act, R.S.O. 1990, c. A.8, the Ontario government’s Feed-In Tariff (FIT) programs, elk management, ferry service to Pelee Island, and trespass to farmland.

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 OFA submitted that it has 39 local affiliates (defined by county or region) that meet the requirements set out in sections 5(1)11 and 5(4) of the Regulation (this number is a subset of the 52 local affiliates that belong to the OFA). In support of its submission, the OFA provided the Tribunal with a list of the 1,211 registered farming business members claimed by the OFA, indicating the number of members in each county or region. In 39 of those counties or regions, there are at least ten registered farming business members claimed by the OFA. As farm business registrants, these members carry on farming businesses within the counties or regions in which they are located. The OFA filed samples of 1,211 letters from these members (identical in form) confirming that each member paid the OFA’s membership fee. In addition, the OFA filed sample letters from 21 local affiliates stating that the requirements set out in section 5(4) of the Regulation had been met.

There are a number of difficulties with the OFA’s submission. First, the OFA is relying upon farm business registrants who do not qualify as members under the legislation to try to satisfy the requirements of sections 5(1)11 and 5(4) of the Regulation. As discussed under section 5(1)1 above, the Tribunal is unable to find that any of the 1,211 registered farming business members claimed by the OFA are members within the meaning of the legislation.

In its written submissions in response to the Tribunal’s Interim Order, the OFA suggested that individual farm members and associate members might also qualify as members for the purposes of this criterion. However, the Tribunal finds that associate members do not qualify under this criterion because, as noted under section 5(1)1 above, they do not carry on a farming business as required by section 5(4)(a) of the Regulation. Individual farm members could qualify, but, as noted under section 5(1)1 above, there is no evidence from which the Tribunal could determine whether those members carry on a farming business as required by section 5(4)(a) of the Regulation.

A further difficulty with the OFA’s submission is that the Tribunal is unable to determine from the evidence whether the executives of the 21 local affiliates claimed by the OFA were elected by persons who were members within the meaning of the legislation, as required by section 5(4)(b) of the Regulation. If the elections were held prior to the May 23 Decision, persons making a payment to the OFA under section 21 of the Act were almost certainly treated as members, in the absence of an explicit membership agreement, and allowed to vote. In that case, the local executives of those local affiliates 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. In the absence of any evidence on this point, the Tribunal is not satisfied that the OFA has complied with section 5(4)(b) of the Regulation.

The Tribunal is also concerned that at least some of the members of the local executives may not qualify as members under the legislation. 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 local affiliate that the members of the local executive are drawn from the local members of the farm organization. There is no evidence from which the Tribunal could determine whether the members of the local executives qualify as members under the legislation. In the absence of such evidence, the Tribunal is not satisfied that the OFA has complied with section 5(4)(b) of the Regulation.

Based on the above deficiencies, the Tribunal finds that the OFA 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 OFA’s most recent completed fiscal year prior to the hearing was the year ended August 31, 2011. At the hearing, the OFA made the calculations required under section 5(1)12.i of the Regulation by counting only its 1,021 individual farm members and associate members in 2011. The revenues from those memberships totaled $198,937, while the OFA recorded contributions to its local affiliates of $1,992,983 in its 2011 fiscal year, which is 1001% of the revenue number.

In its written submissions in response to the Interim Order, the OFA took a different approach and counted not only individual farm members and associate members but also registered farming business members in 2011. The basis of this change in approach appears to be the OFA’s argument that all of its registered farming business members in 2011 were members within the meaning of the legislation, as a result of the 2008 Decision. The revenues from the registered farming business members in 2011, after refunds, totaled $7,177,192. Using this revenue number, the OFA’s contribution to its local affiliates of $1,992,983 in 2011 was 27.8% of the revenue number. That percentage, however, only includes revenues from registered farming business members. When the revenues from individual farm members and associate members of $198,937 are added to the net revenues from registered farming business members of $7,177,192 (for a total of $7,376,129), the contribution to local affiliates of $1,992,983 is 27.0% of total revenues from those members.

Both of these approaches violate the presumption of consistent expression because, in making the required calculations, the OFA is using a subset of its members rather than all members within the meaning of the legislation. In both cases, the agricultural/commodity organization members are left out of the calculations even though they are members within the meaning of the legislation. In addition, the inclusion of registered farming business members in the OFA’s second approach violates the presumption of consistent expression because it includes as members persons who did not qualify as members in 2011, as discussed under section 5(1)7 above. The word “members” has the same meaning throughout section 5 of the Regulation, and it is not open to the OFA to use a subset of its qualifying members, or to include persons who are not qualifying members, in calculating the required percentages under section 5(1)12.i of the Regulation.

A further difficulty is that, in calculating its contributions to local affiliates, the OFA appears to be counting all of its county and regional organizations as local affiliates, without regard to whether those county and regional organizations met the requirements of sections 5(1)11 and 5(4) of the Regulation in 2011. There is no evidence that the OFA 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.

Finally, the Tribunal notes that the OFA, 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 OFA 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 OFA’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 OFA filed its audited financial statements with the Tribunal for the fiscal year ended August 31, 2011, which was the most recent completed fiscal year prior to the hearing. The financial statements include an auditor’s report from Grant Thornton LLP dated November 11, 2011. As a result of the May 23 Decision, the OFA restated its financial statements as of July 5, 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 auditor’s report states that, in the auditor’s opinion, “the financial statements present fairly, in all material respects, the financial position of Ontario Federation of Agriculture at August 31, 2011, and the results of its operations and its cash flows for the year then ended in accordance with Canadian generally accepted accounting principles” (also known as “GAAP”). The auditor’s report further provides that “[w]e conducted our audit in accordance with Canadian generally accepted auditing standards” (also known as “GAAS”). Ms. Perkes, who is a certified general accountant, testified that GAAP is part of the Handbook of the Canadian Institute of Chartered Accountants (also known as the “CICA Handbook”) referred to in section 5(3)(b) of the Regulation, and that GAAS is used to audit GAAP. Although it would have been helpful to have an explanation of these concepts from the auditor (either in the financial statements or in a separate letter), the Tribunal is satisfied that the financial statements and the auditor’s report were prepared in accordance with the standards set forth in the CICA Handbook.

With respect to section 5(3)(c) of the Regulation, the OFA’s financial statements show that the amount received under section 21(3) of the Act in 2011 was $7,543,207. There were 1,877 refunds under section 21(8) of the Act, totaling $366,015. Although the financial statements show percentages of certain revenues that were contributed to county and regional organizations in 2011, the revenue amounts do not include revenues from all qualifying members, include revenues from non-qualifying members, and have not backed out the HST as required by section 5(1)12.i of the Regulation. All of these deficiencies are discussed under section 5(1)12 above. In addition, in the absence of evidence that the OFA 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 OFA’s financial statements are therefore not meaningful for the purposes of accreditation under the Act. Until the OFA can show meaningful percentages in its financial statements, based on revenue numbers that correctly reflect the OFA’s membership and 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 OFA 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 OFA 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 OFA 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 OFA 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 OFA remains a party to the Agreement, even if the OFA’s obligations under the Agreement terminated with the May 23 Decision (subject to the OFA’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 OFA 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 OFA does not meet the legislative requirements for accreditation at this time. Although the Tribunal acknowledges the important role played by the OFA in the Ontario agriculture industry, the Tribunal has no discretion under the legislation to accredit the OFA 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 OFA, 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 OFA on this application for accreditation arise from the OFA’s membership structure and its inability to treat persons making a payment to the OFA under section 21 of the Act as members for the 2011 fiscal year. The Tribunal has also identified deficiencies for which changes to the OFA’s by-laws, policies, and procedures may be required. It could take some time for the OFA 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 OFA for a period of three years, commencing on the date of this decision, to allow the OFA 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 OFA’s application.

Order

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

Dated at Hamilton, Ontario, this 14^th day of November, 2012