Ontario Federation of Agriculture (Re), 2023 ONAFRAAT 12

Agriculture, Food and Rural Affairs Appeal Tribunal

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

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

2023 ONAFRAAT 12

FILE NO: 098OFA23

DATE: 08/22/2023

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 under Subsection 7(1) of the Act for renewal of its accreditation

AND IN THE MATTER OF an electronic hearing to be held pursuant to Rule 18 of the Tribunal’s Rules of Procedure.

HEARD: June 22, 2023, by video conference

Before: Brandi Neil, Vice-Chair, Dave Fawcett, Member, Dave Stevens, Member

Appearances:

Cathy Lennon: OFA General Manager

Kelly Alves: OFA Executive Liaison

DECISION

Background

1The Farm Registration and Farm Organizations Funding Act, 1993 (the “Act”) sets out the process for accreditation and renewal of accreditation for organizations representing farmers in the province. Previously, a farm organization could apply for renewal under the Act every three years.

2Under the Act farm businesses can apply for registration and obtain a “Farm Business Registration” (“FBR”) number which is required for farming properties to receive beneficial property tax treatment. When a farm business applies for an FBR number it is required to pay a prescribed fee to one of the accredited farming organizations.

3Originally the Act provided for two “deemed” farming organizations, the Applicant Ontario Federation of Agriculture (“OFA”) was one of the original two.

4Since 1993, the OFA has successfully applied for renewal of its accreditation each successive three-year cycle.

5In December 2020, Ontario Regulation 783/20 (the “Regulation”) came into force and increased the effective period of the accreditation from three to five years.

6The Act prescribes that the Tribunal “hold a hearing before determining whether” an organization’s accreditation is renewed. The Act provides that if the Tribunal determines the farm organization meets the “prescribed criteria”, the Tribunal “shall, by order, accredit” the organization. The prescribed criteria are set out in the Regulation.

7The organization seeking renewal is a party to the hearing further to subsection 5(3) of the Act. The Act provides in subsections 5(2) and 8(2) that the following persons/organizations are entitled to receive notice of an application for renewal by a farm organization and that they may make submissions in the accreditation hearing:

1. The Minister.
2. The Director.
3. Each accredited farm organization.
4. The francophone organization that is receiving special funding under the Act.

8As this decision will explain, the OFA has largely satisfied the prescribed criteria and accordingly, the Tribunal will order the provision renewal of the OFA’s accreditation for a period of 60 days. During that time period the OFA will be required to provide some further evidence to show complete satisfaction of the criteria so that that an unconditional renewal of their accreditation can be ordered for a period of five years.

The Criteria, Evidence and Findings

9The submissions and evidence for the OFA were provided by OFA General Manager Cathy Lennon. Also present from the OFA was Executive Liason, Kelly Alves but she did not provide any testimony.

10Both the Christian Farmers Federation of Ontario and the National Farm Union – Ontario had representatives in attendance but as observers. Neither of those farm organizations made submissions.

11On October 24, 2018, the Tribunal issued an order that effective on December 6, 2018 the OFA was re-accredited as a farm organization under the Act¹. Section 12 of the Regulation provides that the accreditation expires on September 1, in the fifth year after the order was issued. That section also states that the application for renewal must be no earlier than nine months from the accreditation expiration and no later than six months from the expiration. The OFA properly applied on February 7, 2023, within the required time frame.

12The Criteria for the renewal of the accreditation are set out in Subsection 7(2) of the Regulation. I have attached Section 7 of the Regulation as Appendix 1 to this decision. The requirements for the audited financial statements are set out in subsection 7(4). I will go through each item from subsection 7(2) and 7(4).

13The OFA entered into evidence a copy of its September 20, 1959 Letters Patent issued by the Province of Ontario. The Tribunal is satisfied they meet the incorporated status criterion.

14The farming organization is required to represent persons carrying on all types of farming businesses no matter what types of crops, livestock, poultry or other agricultural products the farming business produces. They demonstrated compliance with this requirement through various evidence they presented including: their Strategic Plan, By-laws, Commodity and Agricultural organization member list, Liason letter to commodity organization and the 2021 & 2022 Agricorp Reporting of Major Sources of Farming Income for OFA members.

15The Farm Organization must provide education or training in agricultural matters. The OFA gave evidence that they distribute fact sheets to their members, have webinars that are available on YouTube so they can be a long-term resource, hold in person workshops at their AGM, new releases, and OFA Board Staff are often guest speakers at community events to provide education to the larger agricultural community. Some of the areas they have provided education in are Impact of Snowmobile Trespass, building your team, storm recovery, succession planning, and renewing farm property insurance, to name a few that were mentioned. They also testified that they maintain four separate websites with educational materials, information and support. The websites are the main OFA website, Best Management Practices, farmer wellness, and Homegrown and preservation.

16It was clear from the evidence that the OFA excels in the educational and training component of the criterion.

17The Regulation requires farm organizations to provide advice and analysis to governments, administrative tribunals or advisory bodies about agricultural issues and the creation of programs or policies that are of interest to persons carrying on farming businesses. The OFA demonstrated compliance with this condition through the evidence that included a table with the number of consultations reviewed and written submissions in the last five years as well as the following six written submissions:

Ministry of the Solicitor General re: Animal Welfare Services Act, 2019

Ministry of Environment re: Conservation Authorities Act

Agriculture and Agri-Food Canada re: Fertilizer Emission Reduction

Ministry of Municipal Affairs and Housing re: Ontario Building Code

Ontario Standing Committee on Heritage, Infrastructure & Cultural Policy re: Bill 23, More Homes Built Faster, Act, 2022

Ontario Ministry of Transportation re: Transportation Plan for Eastern Ontario

18The OFA submitted an Agricorp Report from March 31, 2023 demonstrating that 35,196 farm business registrants have selected OFA as their accredited farm organization. They also testified that as of May 31, 2023, the Perth County Federation of Agriculture alone has 1733 supporters. Based on those pieces of evidence, the OFA satisfies the criterion of at least 250 supporters members holding a Farm Business Registration number.

19The OFA gave evidence that they have one class of membership as set out in the by-laws which includes: Individual Farm Members who are individuals who are or have been indirectly involved in farming, Registered Farming Business Members who are individuals or farming businesses which have been assigned a registration number by the Ministry and have not requested a refund of the fee and Agricultural and Commodity Organization Members which are organizations representing persons involved in the production of agricultural products or agricultural commodities. The OFA recognizes supporters and members. Both pay the prescribed fee but members sign a formal membership that in addition to direction of the Farm Business Registration funds going to the OFA, they wish to be a voting member of the OFA. They testified that as of December 31, 2022, out of the 38,781 Farm Business Registrations, 37,325 have completed the membership. They further gave evidence that 96 % of their supporters are Farm Business Registrants that have not applied for a refund. As such they meet the requirement that the majority of its supporters are persons described in the Regulation subsection 7(1)(a).

20The Regulation sets out the accredited farm organization fee for March 1, 2022 is $255 plus hst. The OFA testified that their membership fee for Farm Business Registrants or Individual Farm Members are the same as the fee prescribed in the Regulation as evidenced in their By-Laws and the Agricorp Farm Business Remittance to the OFA for the week ending May 26, 2023.

21Cathy Lennon testified and submitted documentary evidence showing how its supporters are given the opportunity for input on relevant issues via its resolution policy and how the OFA considers and responds to such input. She also testified that all OFA submission responses are tracked through a resolution database which is accessible to all OFA members. The following documents were entered into evidence: OFA’s resolution process document entitled “How to Write an Effective Resolution”, two pieces of correspondence on specific resolution and the Resolutions Activity Report for 2021 and 2022. Based on that evidence the OFA has satisfied the supporter input process requirement.

22The OFA submitted evidence that it has a written agreement with the Minister and the other accredited farm organizations to provide special funding to the Francophone farm organization (hereinafter “UCFO”) entitled to special funding under the Act. The OFA produced a copy of the December 2007 multi-party agreement with no expiry date providing for funding to the UCFO from the OFA (and other farm organizations). They also submitted into evidence:

1. A letter to the UCFO dated February 6, 2023 outlining the 2023 projections for payments to the UCFO

2. The UCFO cheque remittance

3. Letter to UCFO from OFA setting out the final 2022 numbers and top up payment as it exceeded projections.

Based on that evidence, the Tribunal determined that the OFA satisfies the Francophone agreement/funding criterion. From evidence presented in the accreditation hearings of both the Christian Farmers Federation of Ontario and the National Farmers Union-Ontario, it appears there is a newer version of this agreement from December of 2015 with similar content, signed by the OFA. In any event, the Tribunal accepts this requirement is met.

23The OFA submitted a list of its 55 County/Region branches throughout the province, all of which had more than 10 active Farm Business Registrants. Cathy Lennon testified that there were 51 local branches in the province that were referred to as County or Region federations that each represent 10 or more Active Farm Business Registrants. There is some discrepancy regarding the number of County/Region federations between the document submitted by Ms. Lennon and her testimony. However, both the oral testimony and the document demonstrate the OFA well exceeds the Regulation requirement of 12 local branches in Ontario that represent at least 10 farming businesses.

24The OFA provided testimony outlining the amount of gross revenue they have contributed to the local branches over the last five years. In 2022, they provided $1,343,405 to the local branches which totaled 13.6 per cent. Over the last five years the percentage of gross revenue provided has ranged between 13.2 -14.5 per cent. In each year they provided well in excess of 10 per cent. They entered into evidence page 20 from the 2022 financial statements which sets out the amount of the payments to the local branches in 2022. Based on this evidence the Tribunal is satisfied that the OFA contributes at least 10 per cent of its annual gross income to the local branches.

25Section 7(2)12 of the Regulation requires that the OFA has an arrangement or agreement with its local branches that has provisions regarding five specified areas set out in the appendix. Cathy Lennon testified that they have written agreements with 40 of the branches and have arrangements with the remaining branches that covers the five items. They entered into evidence a copy of one of their Memorandum of Agreements. She further testified that for those without agreements:

• the OFA By-laws also set out the roles and responsibilities of the local branches

• the branches are made aware of the dispute resolution process

• invitations are sent out by the OFA for all meetings and entered into evidence several examples including: 2022 County President Roundtable Meeting, Bill 97 Meeting, Accreditation Meeting and 2022 AGM Meeting Examples of invitation

• the OFA typically receives a specific invitation to the local branch AGM and is asked to provide an update (examples of several invitations were entered into evidence)

• the OFA receives updates from the local branches and receives and reviews the financial statements of local federations to confirm financial viability

26It appears the OFA has met the base requirements of Section 7(2)12 in the general evidence given on this area. However, it would be recommended for future applications that more information be provided including an up-to-date list on which associations have Memorandum Agreements and the specific arrangements with those that do not. The best practice moving forward would be to have signed agreements with every local branch.

27The OFA testifies they have audited financial statements prepared for each fiscal year. They entered into evidence the 2018 - 2022 year end audited financial statements. There was testimony to confirm that the 2022 financial statements were presented at the AGM by Yousef Bola, Director of Finance. The OFA has satisfied the requirement that the statements be prepared each year and that the most recent copy be provided to the Tribunal. However, the Regulation also provides the financial statements be made available to the public within 60 days after is annual general meeting. Unfortunately, this was not covered in the evidence. The Tribunal will need to receive written evidence on this point prior to ordering the final renewal of the accreditation.

28The OFA submitted oral and documentary evidence on their written service standard setting out the rules applicable to applications for refunds under subsection 21(8) of the Act, as required by the Regulations. The link to Agricorp’s web site on Request a refund was shown. The OFA Refund Policy and OFA Service Standards Policy were entered into evidence and it was explained they are available to the public on request. The Tribunal is satisfied they have complied with this requirement of the Regulations.

29The Regulations set out several requirements for the financial statements in subsection 7(4). The past five-year financial statements were entered into evidence. in her evidence Cathy Lennon reviewed the 2022 financial statement in detail. The Financial statements include an auditor’s report and opinion by BDO and have been prepared by an auditor in accordance with generally accepted auditing standards.

30The total revenue derived by Farm Business Registrations in 2022, $9,860,925 is included in the statement as required but not the number of supporters of the farm organization. This is a requirement of the Regulations. Cathy Lennon testified that the total number of supporters of the OFA was presented by Director of Finance Yousef Bola to the membership at the AGM held on November 22, 2022, as part of the Report to Membership. A portion of the Report to Membership PowerPoint presentation was entered into evidence.

31The OFA 2022 financial statements showed a year end of August 31, 2022 and set out:

• 929 refunds that totaled $239, 655

• $135,497 to the francophone organization

• $1,343,405 to its local branches.

30The financial statements from 2018-2021 also provide all the required information except for the inclusion of the number of supporters. This appears to be an oversight as it was not a previous requirement under the predecessor regulation, Ontario Regulation 723/93. The current Regulation came into force in December of 2020. The number of supporters was presented at the Annual General Meeting. This appears to just be a technical breach and the OFA will be given time to rectify this deficiency in the financial statements.

31Overall the OFA is in compliance with the Criteria set out in the Regulation. The Tribunal will provide the OFA with 60 days to provide: the date the 2022 audited financial statements were made available to the public and amended 2022 audited financial statement that includes the number of supporters.

32If the OFA is able to show complete satisfaction of the criteria within the 60 day time period, the Tribunal will issue an order for the renewal of their accreditation for a period of five years from the date of this provisional order.

33As the deficiencies are minor in nature the Tribunal will not make an order suspending payments under subsection 7.3(2) of the Act.

ORDER

33The Tribunal makes the following order:

1. The Ontario Federation of Agriculture is given a provisional accreditation and is required to provide to the Tribunal within sixty (60) days from the date of this order:

i) Proof of Compliance with Farm Registration and Farm Organizations Funding Act, 1993 Ontario Regulation 783/20, Subsection 7(2) 13., by way of affidavit evidence which sets out when the audited financial statements became available to the public after the Annual General Meeting.

ii) Proof of Compliance with Farm Registration and Farm Organizations Funding Act, 1993 Ontario Regulation 783/20, Subsection 7(4)(b), by way of providing an Amended 2022 Audited Financial Statements signed and dated by the Independent Auditor that includes the total number of supporters the farm organization had in the fiscal year.

iii) A request for an extension of the sixty (60) days to provide the required evidence and documents.

2. Should the Tribunal not receive the documents or a request for extension within sixty (60) days the Tribunal will refuse the Ontario Federation of Agriculture’s accreditation renewal.

Released: August 22, 2023

Appendix 1

Farm Registration and Farm Organizations Funding Act, 1993

ONTARIO REGULATION 783/20

GENERAL

Accreditation of Farm Organizations

Criteria

7. (1) In this section,

“supporter”, with respect to a farm organization, means,

(a) any person that has made a payment under subsection 21 (1) of the Act to the farm organization and has not applied for a refund of the payment under subsection 21 (7) of the Act, whether or not the person is a member of the farm organization, and

(b) any member of the farm organization that is not a farming business required to obtain a farming business registration number under section 2 of the Act. O. Reg. 871/21, s. 1.

(2) For the purposes of sections 6, 7.2, 7.3 and 10 of the Act, the following are the criteria for a farm organization to be accredited or to have its accreditation renewed:

1. The farm organization is incorporated under a general or special Act of the Legislature.

2. Its purpose is to represent persons carrying on all types of farming businesses and it is willing to represent a farming business no matter what types of crops, livestock, poultry or other agricultural products the farming business may produce.

3. It provides education or training in agricultural matters.

4. 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.

5. At least 250 persons that have a farming business registration number are supporters of the farm organization or, in the case of a farm organization that is not accredited, have paid to the farm organization, in the year in which the farm organization is applying to be accredited, an amount equal to the amount required to be paid under paragraph 3 of subsection 4 (1).

6. The majority of its supporters are persons described in clause (a) of the definition of “supporter” in subsection (1).

7. The fee required for membership in the farm organization, or for a class of membership in the farm organization, consists of the payment to the farm organization of the amount that is payable under subsection 21 (1) of the Act.

8. It has an established process that allows supporters that have a farming business registration number to make submissions to it on any relevant issue and that requires it to consider the submissions and respond.

9. Subject to subsection (3), it has entered into a written agreement with the Minister and with all other accredited farm organizations to provide special funding to the francophone organization that is eligible to receive special funding under the Act.

10. It has at least 12 local branches located in Ontario, each of which must represent at least 10 farming businesses.

11. It contributes to its local branches at least 10 per cent of the gross revenue for any given year that is received from payments made under section 21 of the Act for that year, excluding any refunds that have been provided in that year under subsection 21 (8) of the Act.

12. It has an arrangement or agreement with its local branches located in Ontario that includes the following:

i. Provisions setting out the respective roles and responsibilities of the farm organization and the local branches.

ii. Provisions setting out a dispute resolution process respecting disputes between the farm organization and a local branch.

iii. A requirement that the farm organization allow each local branch to send a current member to any meeting of the farm organization to which local branches are invited to send representatives.

iv. A right on the part of the farm organization to send a representative to attend each local branch’s annual general meeting.

v. A right on the part of the farm organization to request information from each local branch with respect to the local branch’s governance, activities and financial viability.

13. It prepares audited financial statements for each fiscal year in accordance with subsection (4) and makes them available to the public within 60 days after its annual general meeting in the relevant fiscal year.

14. In the case of an accredited farm organization applying to have its accreditation renewed, the farm organization has provided a copy of its most recent audited financial statement to the Tribunal.

15. In the case of an accredited farm organization applying to have its accreditation renewed, the farm organization has developed a written service standard setting out the rules applicable to applications for, and the timing and processing of, refunds under subsection 21 (8) of the Act, and the service standard is available to the public on request. O. Reg. 871/21, s. 1.

(3) The requirement to enter into an agreement described in paragraph 9 of subsection (2) does not apply to a farm organization that is applying to be accredited for the first time if the farm organization agrees, in writing, to enter into an agreement described in that paragraph as soon as possible after being accredited. O. Reg. 871/21, s. 1.

(4) An audited financial statement for a fiscal year shall include,

(a) financial statements and an auditor’s report prepared by an auditor in accordance with generally accepted auditing standards;

(b) the total number of supporters the farm organization had in the fiscal year;

(c) the total amount the farm organization received from payments remitted under subsection 21 (3) of the Act in the fiscal year;

(d) the number of refunds the farm organization provided under subsection 21 (8) of the Act in the fiscal year and the total amount of those refunds;

(e) the amount, if any, the farm organization paid in the fiscal year to the francophone organization eligible to receive special funding under the Act; and

(f) the amount the farm organization allocated to its local branches in the fiscal year. O. Reg. 871/21, s. 1.

Footnotes

1. 1Re OFA Accreditation 2018 ONAFRAAT 14