Agriculture, Food and Rural Affairs

Appeal Tribunal

1Stone Road West

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

1 Stone Road West

Guelph, Ontario, N1G 4Y2

Tel: (519) 826-3433, Fax: (519) 826-4232

Email: AFRAAT@ontario.ca

Guelph (Ontario) N1G 4Y2

Tél.: (519) 826-3433, Téléc.: (519) 826-4232

Courriel: AFRAAT@ontario.ca

AGRICULTURE, FOOD AND RURAL AFFAIRS APPEAL TRIBUNAL

APPEAL:

Steven Lantz of Lantz Meat Market vs Director of Regulatory Compliance (RE)

Steven Lantz of Lantz Meat Market

STATUTE:

Food Safety and Quality Act

HEARING:

September 14 and 15, 2017

DATE OF DECISION:

October 25, 2017

2017-13

NEUTRAL CITATION:

2017ONAFRAAT13

IN THE MATTER OF THE FOOD SAFETY AND QUALITY ACT, 2001

AND IN THE MATTER OF: An Appeal to the Agriculture, Food and Rural Affairs Appeal Tribunal by Steven Lantz of Lantz Meat Market, in Hanover, Ontario, under Section 35 of the Food Safety and Quality Act, 2001 (FSQA) from a decision of a Director appointed under the FSQA dated April 11, 2017.

Before:

John O’Kane, Vice Chair, John Wilson, Vice-Chair and Tim Mousseau, Member

Appearances:

Steven Lantz of Lantz Meat Market, Appellant

Robert Scriven, Counsel for the Appellant

Joan Torrie, Counsel for the Director

DECISION OF THE TRIBUNAL

Overview

Steven Lantz operates Lantz Meat Market as a sole proprietorship from a base of operations in Durham, Ontario. During the spring, summer and fall seasons, he also operates at farmers’ markets, country fairs and other similar events. At all these venues he sells food that he has prepared at his Durham base of operations.

During an investigation of Steven Lantz’ business operations, an investigator with the Meat Inspection Branch of the Ministry of Agriculture, Food and Rural Affairs (“Ministry”) determined that Steven Lantz was operating an unlicensed meat plant and detained a quantity of meat products at Steven Lantz’ premises in Durham. That Detention Notice was made under Section 32 of the Food Safety and Quality Act, 2001 (“FSQA”) and was dated September 10, 2016. The basis for the Detention Notice was “conducting regulated activities without a licence”. Steven Lantz asserted entitlement to an exemption from the requirement to have a licence.

Under Section 33 of the FSQA, Steven Lantz sought a hearing before a Director. At the Director’s hearing Steven Lantz claimed an exemption from the legislation governing meat plant licensing. The Director determined that Steven Lantz’ meat plant was not exempt from the licensing requirements of the FSQA and made an Order for Disposal of the detained meat products. Steven Lantz appealed that Director’s Order to the Agriculture, Food and Rural Affairs Appeal Tribunal (“Tribunal”).

Under Section 35 of the FSQA, the Tribunal hearing is a new hearing and the powers of the Tribunal are the same powers of an inspector or a Director.

Counsel for Steven Lantz described the appeal as a test case since there had been no previous Tribunal cases involving interpreting the exemptions in the meat regulation made under the FSQA.

There is an extensive evidentiary context in this appeal but the material facts are not significantly disputed. The case is essentially one of statutory interpretation.

For the reasons explained below, the Tribunal grants Steven Lantz’ appeal.

Legislative Scheme

The purposes¹ of the FSQA are threefold:

1. the quality and safety of food, agriculture or aquatic commodities and agricultural inputs;

2. the management of food safety risks; and,

3. the control and regulation of regulatable activities.

The focus of this appeal did not involve any issues with the quality or safety of food.

The FSQA contains a comprehensive prohibition on regulated activities unless licensed.

4.(1) No person shall carry on a licensed activity or operate a premises where a licensed activity is carried on unless the person holds a licence for the activity issued under this Act.

The FSQA definitions of “licensed activity” and “regulatable activity”² are comprehensively and broadly defined and in the context of this case would include meat processing and selling meat products as done by Steven Lantz.

Under Section 53 of the FSQA, authority is granted to the Lieutenant Governor in Council to make regulations for, among other matters “exempting persons or classes of persons from the requirement to have a licence in the circumstances, if any, specified in the regulations and specifying the conditions that attach to the exemptions.”

The prohibition set out above in Section 4 of the FSQA is further animated in Part III of Ontario Regulation 31/05, more commonly known as the “Meat Regulation” where in subsection 5(2) it provides:

5. (2) The following regulatable activities are licensed activities to which section 4 of the Act applies when carried on by a person who is engaged in the business of operating a freestanding meat plant:

6. The processing, handling, storage, packaging, labelling, sale and distribution of meat products.

Under the Meat Regulation, “processing” is broadly defined to include, among other things, “cooking”, “curing”, “fermenting”, “freezing”, “marinating”, “salting”, “smoking”.

In this case, the exemption that Steven Lantz sought to engage is set out in subsection 2.1(2) of the Meat Regulation. The relevant passages from the Meat Regulation are as follows:

1. (1) In this Regulation,

“freestanding meat plant” means a premises, other than a slaughter plant, where one or more Category 1 or Category 2 activities are carried on as a business, except as provided in subsection (2.1), and includes any part of the premises where,

(b) carcasses, parts of carcasses, meat products from food animals are produced, processed, handled, stored, packaged, labelled, distributed or sold,

2.1 (1) Despite the definition of “freestanding meat plant” in subsection 1 (1), this Regulation does not apply to the following premises:

1. Premises at which a business carries on the activities of both a freestanding meat plant and a food service premise as defined under Regulation 562 of the Revised Regulations of Ontario, 1990 (Food Premises) made under the Health Protection and Promotion Act, if the majority of the business conducted at the premises, as determined under subsection (2), results from activities associated with a food service premise.

(2) For the purposes of paragraph 1 of subsection (1), the majority of the business conducted at the premises described in that paragraph is deemed to result from activities associated with a food service premise if,

(a) In the business’ preceding fiscal year, the sale or service of meals or meal portions prepared for immediate consumption or sold or served in a form that will permit immediate consumption on the premises or elsewhere accounted for over 50 per cent of the sales made from the premises as measured by,

(i) The dollar value of the total sales made by the business, or

(ii) The total weight of meat products sold by the business, or

That exemption in subsection 2.1(2) of the Meat Regulation engages considering the Health Protection and Promotion Act (“HPPA”) which defines a “food premise” to mean a “premises where food or milk is manufactured, processed, prepared, stored, handled, displayed, distributed, transported, sold or offered for sale, but does not include a private residence” and Ontario Regulation 562 made under the HPPA and which defines a “food service premise” to mean “any food premise where meals or meal portions are prepared for immediate consumption or sold or served in a form that will permit immediate consumption on the premises or elsewhere”.

As Steven Lantz candidly admitted, if his business was not exempt, he would be required to have a license issued under the Meat Regulation. That licensing process under the Meat Regulation is understandably stringent and includes comprehensive documentary requirements such as:

• A licence application in a form approved by the director
• Plans and specifications of the meat plant
• Water test results proving the drinking water meets the microbiological standards in Schedule 1 of the regulations made under the Safe Drinking Water Act, 2002
• A list of all names of persons that are operators of the plant
• A list of every water system that supplies the plant
• All information and documents the director requires for determining if the plant meets the requirements of the Act and regulations
• Payment of the required fee
• A schedule of the days and times at which the applicant anticipates that animal carcasses will be dressed at the plant
• A schedule of the days and times at which the applicant anticipates that meat products will be processed, packaged, handled, distributed or sold

The Evidence

Steven Lantz

Steven Lantz is 55 years old. After high school he took the meat cutting course at Conestoga College and since then has taken several food safety courses. He has worked as a butcher for his entire adult working life. In 1988 he bought an abattoir where he slaughtered, cut and wrapped meat as well as, cooked and smoked meat products. He was on the executive of the Meat Packing Association, involved in lobbying in respect of policy changes in the meat packing industry and has won awards for his meat products. In 2005 he ceased the slaughter aspect of his business and moved into the food service business. Between 2010 and 2014 he was involved in co-packing meat products. In 2010 he stopped further processing meat products and surrendered his licence to operate a meat plant when the legislation changed. He found that for the small amount of further processing that he did in his business, it was no longer economically feasible under the new legislative regime.

In 2014, Steven Lantz learned from a colleague about the amendments to the Meat Regulation creating the exemption that he seeks to engage on this appeal. He investigated the exemption conditions and concluded that his business could take advantage of the exemption. He conducted research on the Ministry website and obtained a description of the Ministry’s “Meat Inspection Program”. He also contacted Allen Yee, the relevant Area Manager at the Ministry about the exemption. Mr. Yee told him that while he did not know about the exemption, but he would look into it. He never heard back from Mr. Yee about the exemption.

Steven Lantz testified that he has a shop in Durham where he runs his seasonal business between May 1^st and Christmas. At the shop he processes meats and stores meat products in refrigerators and freezers. The processing includes smoking and curing meats. He explained that during the May 1 to Fall season he has a mobile meat shop in a trailer that he transports to farmers’ markets, country fairs and similar events. At those venues, in addition to using his mobile meat shop trailer, he sets up tents, tables and a mobile kitchen where he cooks and sells food such as hamburgers, hot dogs, sausages on a bun, French fries, popcorn and snow cones. After the Fall season he does custom cutting and processing for wild game hunters. He explained that his processed meat products are all either Category 1 or Category 2 products under the Meat Regulation and if his operation was not exempt he would need a license to operate his meat plant. He testified that he buys his raw meat for processing from Harriston Packers, which he testified was a licensed and inspected meat plant.

Steven Lantz testified that at the start of each season he contacted the Grey Bruce Public Health Unit who typically conducts an inspection of his meat shop trailer and his mobile cooking facilities. When he began the 2014 season he was inspected by the health unit in July 2014 and discussed with the public health unit inspector that he was operating under the exemption in the Meat Regulation. In his discussions with the Health Unit inspectors, he concluded that his business operation was under the Health Unit’s jurisdiction.

Steven Lantz testified that at each event or venue he tracked his sales on a calendar. He explained that using calendars to track his sales had been his business practice dating back to 1998 and in evidence he produced the calendars for 2013 through 2016. For hearing purposes, those calendar results had also been transferred into spreadsheet documents for 2013 to 2015 that allowed for easier analysis of the sales information. He testified that he does do some sales from his meat plant in Durham but that he does not record those sales on the calendar.

Since the inspection and Detention Notice that initiated this proceeding were in 2016, the wording of the exemption in subsection 2.1(2) of the Meat Regulation makes the fiscal year 2015 relevant.

Steven Lantz’ evidence regarding his sales as recorded on his calendar for fiscal year 2015 was $138,669.62. He also produced in evidence a Statement of Business or Professional Activities prepared by his accountant and that formed part of his income tax return. That Statement reflected business income of $149,633.23. Steven Lantz explained the $10,963.61 difference between his calendar for 2015 and his income tax document as the revenue he generated from sales at his Durham meat shop and the income he received for his custom wild game processing.

The spreadsheet created for the hearing showed the event sales from the 2015 fiscal year broken into categories and amounts as shown on the table below. The “meat” column reflects sales of meat products that are not ready for immediate consumption. For example, those products would include packaged raw hamburger meat or uncooked pork chops. Steven Lantz’ testified that the balance of the sales were of food ready for immediate consumption.

Meat

Drinks

Sausage

Popcorn

Food Service

Snowcones

21,390.87

2,370.25

12,041.50

61,406.00

39,395.00

2,066.00

Carla Royston

Carla Royston is the Acting Manager of the Meat Inspection Operations Unit for the Ministry. Part of her unit’s role is processing applications for licensing and answering technical questions about the regulations.

She provided an overview of the meat plant licensing process including the technical review of plans and specifications to ensure compliance with the FSQA and regulations. She confirmed that a licensed operator is required to maintain substantial records including:

• Sanitation records
• Recipe records
• Processing time and temperature records
• Distribution Records

Carla Royston confirmed that Steven Lantz had previously operated a licensed meat plant but had voluntarily ceased all regulated activities in 2010 when he surrendered his licence.

Carla Royston testified that the Ministry’s meat inspection program uses a system described as “progressive compliance” to monitor the meat industry. She explained that progressive system uses a hierarchy that begins with educational awareness then moves upward in severity to verbal warnings, followed by written warnings and licence suspension. In addition, charges are possible for contravention of the FSQA and regulations.

Carla Royston confirmed that doing any regulated activity requires a licence unless the activity fit under one of the three following exemptions:

• Food product exemption
• Small volume exemption
• Food service exemption

She explained it was up to the person claiming an exemption to provide sufficient proof that they qualify for the exemption. She also explained how, any exemption operation would then be subject to the regulatory authority of the local public health unit and as well remain subject to occasional inspection by the Ministry to ensure no regulated activity occurs.

Carla Royston explained that the documents required to prove entitlement to an exemption are dependent on the circumstances and the nature of the exemption claimed.

Carla Royston identified generally several Ministry publications from its website that explain the Meat Regulation and the exemptions from licensing. She acknowledged that a caterer or restaurant would not require a license if more than 50% of their sales were of products that were for immediate consumption. She confirmed that the policy goals behind changing the Meat Regulation to allow for, among other things, exemptions included:

• Moving toward a more flexible and outcome based regulation
• Reducing burden
• Removing barriers
• Clarifying the regulation language

She acknowledged that operations exempted from the licensing requirement would be inspected by local public health units.

She agreed that the exemption threshold for a food service exemption under the Meat Regulation was either dollar value of sales or weight of meat product sold.

Jasjeet Bola

Jasjeet Bola is a Public Health Unit Inspector with the Grey Bruce Health Unit and part of his assigned geographic area included the Lantz Meat Market in Durham.

Jasjeet Bola explained examples of a “food service premise” under the HPPA, might include a restaurant, a food take-out establishment, an event or a mobile food service establishment. He testified that when inspecting such facilities his focus is compliance with the “Food Premises Regulation”, Regulation 562 made under the HPPA. He also explained how he worked with Ministry inspectors on joint inspections and on reporting facilities that he considered under Ministry jurisdiction.

Jasjeet Bola testified how during an inspection of the Lantz Meat Market in Durham, he noted Category 2 products that he considered to be under Ministry jurisdiction and that resulted in him contacting Ministry inspector Scott Fisher to participate in a joint inspection of Lantz Meat Market in October 2015.

Jasjeet Bola testified that he contacted Ministry inspector Fisher in 2015 because there had been a Memorandum of Understanding (“MOU”) between the Ministry and Grey Bruce Health Unit that public health inspectors should be attentive for any Category 2 products during inspections and reporting those to the Ministry. He confirmed that Steven Lantz was not hiding the fact that he was engaged in regulatable activity.

When shown photographs of the Lantz Meat Market mobile trailer, Jasjeet Bola agreed that it would constitute a mobile food service premise and that such trailers do go to fairs and events. He also confirmed that kettlecorn as sold by Steven Lantz does fall under a food service premise under the HPPA regulations. He confirmed that Steven Lantz told him that more than 50% of his sales were of food for immediate consumption.

Jasjeet Bola testified that he did not come to any conclusions about whether Steven Lantz’ operation was exempt because that was a determination to be made by the Ministry, not the public health unit.

Scott Fisher

Scott Fisher is a Compliance Officer with the Ministry and testified about his role as a Compliance Office in the Meat Inspection program. He explained in some detail the “progressive compliance” model used by the Ministry.

Scott Fisher testified about the contact he received from Jasjeet Bola and how that prompted a joint inspection of Lantz Meat Market in October 2015. He described how the facility was in the process of being thoroughly cleaned and how, at that time, there was no Category 2 activity taking place. He learned from Steven Lantz about his seasonal operation and that it included Category 2 activities. Steven Lantz also provided access to his calendars where he recorded his sales information. Scott Fisher testified that he found the sales records “unusual” and suggested Lantz make improvement to his sales record keeping. However, he was unable to testify as to any specifics of that recommendation.

Scott Fisher testified about how on August 2, 2016 at the Keady Farm Market, he observed the Lantz operations as follows:

• A tent selling popcorn and kettlecorn
• A trailer with retail freezers selling meat products (smoked, fresh, frozen)
• A tent selling food service products like sausage on a bun

He confirmed that there were Category 2 products being sold from the trailer and that some of those products could be consumed immediately and some not. He also testified that Steven Lantz told him that all the products being sold had been produced at his meat plant in Durham.

Scott Fisher testified how that August 2, 2016 inspection was followed up with an August 11, 2016 inspection at the Lantz Meat Market in Durham. On that occasion he observed what he described as significant Category 2 activities and product volume. Following that inspection, Scott Fisher issued a written demand for documents to Steven Lantz. That demand included requesting documents such as invoices, shipping receipts and manifest applicable to the production and sale of meat products; showing where and to whom meat products were distributed; identifying what products and weight were distributed; documenting the date of distribution; any internal records and recipes for all meat products; all invoices for meat and meat products received; and, financial statements.

Scott Fisher testified about how Steven Lantz response to the demand for documents took place over the next several weeks and that he did not receive all of the documents demanded. He did receive the calendar containing Steven Lantz’ sales for 2015. He also received the Statement of Business Activities prepared by Steven Lantz’ accountants for his income tax return. He testified that he was unable to conclude on the documents received that Steven Lantz was entitled to claim the exemption in subsection 2.1(2) of the Meat Regulation and as a result, he issued the Detention Notice.

On cross-examination, Scott Fisher confirmed that Steven Lantz was claiming the food service exemption and that the key to that exemption is sales records and it matters not if the total sales are large or small.

Material Findings of Fact

The Tribunal finds as a fact that Steven Lantz’ total sales of product at farmers’ markets, country fairs and events for fiscal year 2015 was $138,669.62.

In support of that finding of fact the Tribunal relies on:

• The uncontradicted oral testimony of Steven Lantz about that total.
• While Steven Lantz was cross-examined, that $138,669.62 in total sales as recorded in his 2015 calendar was not shaken nor seriously challenged.
• The 2015 calendar produced in evidence with the daily handwritten notation of sales.
• The spreadsheet produced in evidence that summarized the 2015 calendar sales data.

The Tribunal finds as a fact that Steven Lantz’ total business for fiscal 2015 was $149,633.23.

In support of that finding of fact, the Tribunal relies on:

• The uncontradicted oral testimony of Steven Lantz about that total.

• While Steven Lantz was cross-examined, that $149,633.23 in total business in 2015 was not shaken nor seriously challenged.

• The 2015 Statement of Business/Professional Activities produced in evidence as completed by Steven Lantz’ accountant for his 2015 income tax filing confirmed that same total.

The Tribunal finds as a fact that the $10,963.61 difference between Steven Lantz’ total business of $149,633.23 and the sales of product at farmers’ markets, country fairs and events of $138,669.62 for fiscal 2015 was attributed to sales of product from his location in Durham that year and his 2015 wild game processing.

In support of that finding of fact, the Tribunal relies on:

• The uncontradicted oral testimony of Steven Lantz about those amounts.

• While Steven Lantz was cross-examined, that $10,963.61 in other sales was in 2015 was not shaken nor seriously challenged.

The Tribunal finds as a fact that in fiscal 2015, while at farmers’ markets, country fairs and events Steven Lantz sold food that fell into the following two general categories.

1. The first category was “meat”. The “meat” food had been prepared and processed by Steven Lantz at his location in Durham and he sold that from his mobile trailer in either fresh or frozen formats. Examples of that “meat” included fresh or frozen hamburger, pork chops, bacon and sausages. However, most of that “meat” would require the consumer to cook it elsewhere before eating. One exception might be smoked sausages that could be ready to eat, without any further cooking.
2. The second category was “ready to eat”. The “ready to eat” food had been prepared and processed by Steven Lantz at his location in Durham and then cooked and served from tents and tables erected near his mobile trailer. Examples of the “ready to eat” food included popcorn, sausage on a bun, hamburgers, French fries, drinks, snowcones.

In support of those findings of fact, the Tribunal relies on:

• The uncontradicted oral testimony of Steven Lantz about the products and the sales made at farmers’ markets, country fairs and events.
• While Steven Lantz was cross-examined, his evidence was not shaken nor seriously challenged.
• The photographs produced in evidence that show how Steven Lantz’ business operates at farmers’ markets, country fairs and cultural events is consistent with the explanations Steven Lantz gave in his testimony.
• The oral evidence of Ministry Inspector Scott Fisher who inspected the Lantz Meat Market premises in October 2015 and testified that Steven Lantz explained his business operation. That explanation was consistent with Steven Lantz’ evidence about the business operation.
• The oral evidence of Scott Fisher about his observations of the Lantz business operating at the Keady Farm Market on August 2, 2016. While those observations were from 2016, it provided evidence that corroborated Steven Lantz’ evidence about how his business had operated for years, including fiscal 2015.

The Tribunal finds as a fact that in fiscal 2015, while at farmers’ markets, country fairs and events, Steven Lantz’ total sales of “meat” food as described in the findings above was $21,390.87.

In support of that finding of fact the Tribunals relies on:

• The uncontradicted oral testimony of Steven Lantz about those sales made at farmers’ markets, country fairs and events.
• While Steven Lantz was cross-examined, his evidence about that was not shaken nor seriously challenged.
• The spreadsheet produced in evidence that summarized the 2015 sales information from Steven Lantz’ 2015 calendar.

The Tribunal finds as a fact that in fiscal 2015, while at farmers’ markets, country fairs and events, Steven Lantz’ total sales of “ready to eat” food as described in the findings above was $117,278.75.

In support of that finding of fact the Tribunals relies on:

• The uncontradicted oral testimony of Steven Lantz about those sales made at farmers’ markets, country fairs and events.
• While Steven Lantz was cross-examined, his evidence about that was not shaken nor seriously challenged.
• The spreadsheet produced in evidence that summarized the 2015 sales information from Steven Lantz’ 2015 calendar.

The Issue

The issue is whether the Appellant Steven Lantz is entitled to the exemption in subsection 2.1(2) of the Meat Regulation.

Discussion and Analysis

The exemption in subsection 2.1(2) of the Meat Regulation is to exempt businesses whose primary focus is food service from the more onerous licensing requirements.

This reality is explained in the Ministry’s “Meat Inspection Program” summary document produced in evidence; there is a multi-tiered meat inspection system in Ontario.

Relevant to this hearing are the provincial tier and local health unit tier. As heard in evidence from the Ministry witnesses, there can be overlap between the provincial tier and the local health unit tier.

The provincial tier involves legislation, regulation, licensing and inspection for slaughter and meat plants that are involved in intraprovincial trade.

The local public health unit tier involves legislation and regulation and inspection of, among others, restaurants, caterers, cafeterias, food shops, farmers’ markets, institutions, mobile food service facilities (food trucks).

As explained in the Ministry’s “Meat Inspection Program” a meat plant “requires a licence if it conducts higher risk processing activities (e.g., fermenting, smoking, curing, canning, etc.)³ and the majority of the business is not food service.”

That Ministry “Meat Inspection Program” also explained that amendments were made to the Meat Regulation and effective January 1, 2014 that clarified that a provincial meat plant licence was not required for the following three categories:

• Food product exemption
• Volume distribution exemption
• Food service exemption

There is no doubt that Steven Lantz’ business operation in 2014, 2015 and 2016 included activities that fall within the “higher risk” meat plant processing activities. Steven Lantz conceded that when inspected by the local health unit and when inspected by the Ministry and conceded that in evidence in this hearing.

The food service exemption from subsection 2.1(2) is paraphrased below:

2.1 (1) Despite the definition of “freestanding meat plant” in subsection 1 (1), this Regulation does not apply to the following premises:

2. Premises at which a business carries on the activities of both a freestanding meat plant and a food service premise as defined under Regulation 562 of the Revised Regulations of Ontario, 1990 (Food Premises) made under the Health Protection and Promotion Act, if the majority of the business conducted at the premises, as determined under subsection (2), results from activities associated with a food service premise.

(2) For the purposes of paragraph 1 of subsection (1), the majority of the business conducted at the premises described in that paragraph is deemed to result from activities associated with a food service premise if,

(b) In the business’ preceding fiscal year, the sale or service of meals or meal portions prepared for immediate consumption or sold or served in a form that will permit immediate consumption on the premises or elsewhere accounted for over 50 per cent of the sales made from the premises as measured by,

That regulation wording engages the following series of questions and the answers that flow from the evidence.

1. Does Steven Lantz carry on the activities of a “freestanding meat plant”? Unequivocally yes. That answer is based on Steven Lantz’ concessions to that fact during his oral evidence.

2. Where are those “freestanding meat plant” activities carried on? The only place where Category 1 or Category 2 activities occurred was at Steven Lantz’ permanent business location in Durham. That answer is based on the evidence of Steven Lantz and the public health inspector Jasjeet Bola and the Ministry inspector Scott Fisher were all consistent on that point.

3. Is Steven Lantz’ business a “food service premise”? Once again yes. That answer is based on the evidence of Steven Lantz and the public health inspector and the Ministry inspector.

4. What is the relevant “preceding fiscal year”? In these circumstances, 2015. That answer is based on the Ministry’s Detention Notice that was issued September 10, 2016. The Ministry’s enforcement actions were based on Steven Lantz carrying on regulatable activities without a licence. In response, Steven Lantz claimed the “food service” exemption. The relevant exemption wording begins “in the business’ preceding fiscal year”. The Tribunal interprets that wording to mean 2015 in these circumstances.

5. What percentage of Steven Lantz’ total 2015 sales were “meals or meal portions prepared for immediate consumption or sold or served in a form that will permit immediate consumption? Based on the findings of fact above, just over 78%⁴ of Steven Lantz’ sales in 2015 fell into that category.

6. What form of sales records are required to prove entitlement to an exemption? The Tribunal’s answer is there is nothing in the Meat Regulation that prescribes a particular form of sales record. While Steven Lantz’ calendar recording of his sales may be considered rudimentary and unconventional there is nothing in the legislation to suggest they are inadequate for determining if more than 50% of the sales are from “food service”. The Ministry evidence was that Steven Lantz’ calendar sales records were not satisfactory proof that his business qualified for the exemption. Because it held that view, the Ministry demanded Steven Lantz produce other records, many of which records the Tribunal doubts would be helpful in a sales analysis.

There was some inference during Steven Lantz’ cross-examination that popcorn or kettlecorn or snowcones were not meals. The legislation that the Tribunal was directed to does not define the phrase “meal or meal portions”. In the absence of a statutory definition, words used in the legislation deserve their grammatical and ordinary sense in the context of section of the legislation where they are found and in the context of the scheme of the legislation, the purpose of the statue and the intentions of the legislature.

As noted previously the FSQA describes three purposes: quality and safety of food; management of food safety risk; control of regulatable activities. Those three purposes give us the broad contextual framework. The narrower contextual framework of subsection 2.1 of the Meat Regulation engages definitions of “food premise” and “food service premise” from the HPPA and Regulation 562 made under the HPPA. The Tribunal determined that the context relevant to interpreting “meals or meal portions” is any commercial operation where the consuming public is going to be sold or served food prepared by someone else. Therefore, in order to achieve the statutory purposes, the words “meals or portions of meals” deserve the widest interpretation possible. While popcorn might not be considered a traditional meal or meal portion, in this context the Tribunal finds that it is a “meal or meal portion”. That same analysis applies equally in these circumstances to kettlecorn, sausage on a bun, hamburgers, French fries, drinks and snowcones sold by Steven Lantz.

Another issue arising from the legislation and the facts of this case relate to the fact that Steven Lantz’ “meat plant” is a permanent location in Durham where he does meat processing and occasional meat sales whereas the primary “food service premises” where he sells meals and portions of meals is at a variety of other locations such as farmers’ markets, country fairs and events. The issue then is whether the claimed food service exemption applies to one location or to multiple locations.

The definition wording in section 1. (1) of the Meat Regulation defines a “freestanding meat plant” to mean “a premises”. The legislature’s use of the article “a” in conjunction with the word “premises” in that definition does support an interpretation of a single physical location. That interpretation is further supported within that same definition by the words “and includes any part of the premises”. The use of the article “the” in conjunction with the words “premises” reinforces the interpretation of a single physical location. When considering the broader context of the licensing scheme of the regulation for slaughter and meat plants, it makes interpretive sense that each physical location of a slaughter plant or meat plant would need a licence to operate as such. Under the scheme of the legislation it is not a business per se that becomes licensed, but rather a location where the business carries on regulated activities. Therefore, in the context of the entire scheme, the Tribunal interprets the section 1. (1) definition of “freestanding meat plant” to mean a single physical location.

However, the exemption contained in subsection 2.1(1) begins with the words “despite the definition of “freestanding meat plant” in subsection 1. (1), this Regulation does not apply to the following premises:”

Paragraph 1. of subsection 2.1 then begins using the word “premises” again but in the context of a business carrying on activities that are both a freestanding meat plant and “a food service premise” as defined in the HPPA. The focus of the exemption language is not explicitly on a single location but rather on the combined business activities of meat processing and sales of meals or portions of meals. In contrast to the definition of “freestanding meat plant” in subsection 1. (1), the legislature did not use either article “a” or “the”, but rather used the plural “premises” standing on its own. Applying a grammatical and ordinary sense approach to the word “premises” in paragraph 1 of subsection 2.1 (1) in the context of the words of subsection 2.1 that begin “despite the definition” and considering the legislature’s not using the articles “a” or “the” leads to an interpretation that the legislature intended the premises in the exemption to mean something other than a single physical location.

That interpretation is also supported by the Ministry’s own general information published on its website about the Meat Regulation. For example, the following appears on the Ministry’s website explain the food service exemption.

Businesses are exempt from licensing if the majority of the business’ sales are meal or meal portions prepared for immediate consumption on the premises or elsewhere. That means a restaurant or caterer would not require a provincial licence if more than 50 percent of their business is preparing meals.

In another Ministry publication titled “Frequently Asked Questions Changes to Meat Regulation” the Ministry posed the following question and answer.

3. What is the definition of food service premise?

“Food service premise” means any food premise where meals or meal portions are prepared for immediate consumption or sold or served in a format that will permit immediate consumption on the premises or elsewhere (defined by the Food Premises Regulation). Examples of a food service premises includes a restaurant or caterer.

The Ministry publications are not determinative of the Tribunal’s statutory interpretation but nevertheless they provide informative context for how the Ministry itself informs the public about what the food service exemption in the Meat Regulation is about. That Ministry information does not focus on a physical location but rather speaks about a business and the majority of the business’ sales, without regard for location. That Ministry information also makes specific reference to a catering business.

The Tribunal did hear evidence about catering businesses and how caterers prepare food in a commercial kitchen location and then transport that food to other locations where the food is further prepared or cooked and then served as meals. That evidence accords with what is commonly understood about catering businesses.

The Tribunal agrees with the Ministry’s submission that compliance with the legislation and regulation in the context of this case is not a permanent state. Similarly, entitlement to an exemption under the legislative scheme is not a permanent entitlement. Compliance or exemption entitlement are very much point in time determinations governed by the prevailing fact situation. In this case, the relevant point in time consideration arises with the Ministry’s Notice of Detention of the Lantz Meat Market products in September 2016.

The essence of the Ministry’s argument is that Steven Lantz must show that more than 50% of his sales, at each location where he operates considered independently, are from the sale of meals or meal portions that are ready for immediate consumption. In other words, the Ministry position is that for the permanent location in Durham, Steven Lantz must be able to show that of the approximately $10,000.00 in sales in 2015, more than 50% of those sales were meals or meal portions for immediate consumption. Steven Lantz is unable to do that because his evidence was that he did not maintain sales records for that location.

If that Ministry position is considered in the context of a commercial catering business as described above, a commercial catering business would not be able to prove entitlement to the food service exemption. That would certainly fly in the face of the Ministry’s own published information about how the food service exemption applies to catering businesses.

In addition, the exemption in the Meat Regulation incorporates by reference the food service premise definition from the HPPA regulations. That definition refers to the meal or meal portions being sold or served for “immediate consumption on the premises or elsewhere”. The Tribunal considers that language referencing “or elsewhere” in terms of where the meals or meal portions are consumed militates against the interpretation urged by the Ministry in favour of a single specific location.

Finally, the reference in the exemption in respect of qualifying sales is the sales of the business. If the legislature had intended the relevant sales to be considered at each location individually, it would have signalled that intention with language such as “the sales of the business at each business location or at each business premise”.

In all the circumstances, the Tribunal concludes that the legislature created the food service exemption to allow businesses, such as the Lantz Meat Market to operate free of the more onerous licensing regime for meat plants, provided that the business does more than 50% of its sales in meals or meal portions for immediate consumption.

Based on the findings of fact and the interpretation of the legislation above, the Tribunal concludes that at the relevant point in time, Steven Lantz’ operation of Lantz Meat Market qualified as exempt from the licensing requirement of the Meat Regulation under what has been described as the “food service exemption”.

Having found that Steven Lantz was entitled to the exemption claimed, it follows that the Director’s Disposal Order of the detained product made on the basis that Steven Lantz was not entitled to the exemption, cannot stand.

ORDER OF THE TRIBUNAL

The Tribunal orders that:

1. Steven Lantz’ appeal of the April 11, 2017 decision of the Director is hereby allowed.

2. The April 11, 2017 decision of the Director is hereby revoked.

3. The April 11, 2017 Disposal Order made by the Director is hereby revoked.

4. The Tribunal hereby substitutes its opinion as reflected in the reasons for decision herein for the opinion of the Director.

5. No party requested costs at the hearing and therefore each party shall bear their own costs of the proceeding.

Footnotes

1. 1Part I, section 1, Food Safety and Quality Act, 2001, S.O. 2001, Chapter 20
2. 2Part I, section 2, Food Safety and Quality Act, 2001, S.O. 2001, Chapter 20
3. 3These activities are consistent with the Category 2 activities or products referred to previously.
4. 4$117,278.75 ÷ $149,633.23 x 100 = 78.37%