Agriculture, Food and Rural Affairs Appeal Tribunal 1 Stone Road West
Tribunal d’appel de l’agriculture, de l’alimentation et des affaires rurales 1 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
2023 ONAFRAAT 07
FILE NO.: 002Aocp23
DATE: 2023/05/24
IN THE MATTER OF THE Ministry of Agriculture, Food and Rural Affairs Act, R.S.O. 1990, CHAPTER M.16, AS AMENDED;
AND IN THE MATTER OF an Appeal to the Agriculture, Food and Rural Affairs Appeal Tribunal bythe Association of Ontario Chicken Processors, from a decision of the Chicken Farmers of Ontario, dated May 19, 2023;
AND IN THE MATTER OF An electronic hearing to be held pursuant to Rule 18 of the Tribunal’s Rules of Procedure.
BETWEEN:
Association of Ontario Chicken Processors Appellant
– and –
Chicken Farmers of Ontario Respondent
Represented by Herman Turkstra
Represented by Geoffrey P. Spurr
Heard: May 24, 2023, by video conference
Before: Glenn C. Walker, Chair; Steve Moutsatsos, Vice-Chair; and Judy Dirksen, Member.
Appearances:
Herman Turkstra, Counsel for the Appellant
Geoffrey Spurr, Counsel for the Respondent
Michael Terpstra, Witness for the Appellant
DECISION
- The Tribunal declines jurisdiction in this matter. The appeal is dismissed with written reasons to follow.
Released: May 24, 2023
Agriculture, Food and Rural Affairs Appeal Tribunal 1 Stone Road West
Tribunal d’appel de l’agriculture, de l’alimentation et des affaires rurales 1 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
FILE NO.: 002AOCP23
DATE: 2023/06/14
IN THE MATTER OF THE Ministry of Agriculture, Food and Rural Affairs Act, R.S.O. 1990, CHAPTER M.16, AS AMENDED;
AND IN THE MATTER OF an Appeal to the Agriculture, Food and Rural Affairs Appeal Tribunal by the Association of Ontario Chicken Processors, from a decision of the Chicken Farmers of Ontario, dated May 19, 2023;
AND IN THE MATTER OF An electronic hearing held pursuant to Rule 18 of the Tribunal’s Rules of Procedure.
BETWEEN:
Association of Ontario Chicken Processors Appellant
– and –
Chicken Farmers of Ontario Respondent
Represented by Herman Turkstra
Represented by Geoffrey P. Spurr
Heard: May 24, 2023, by video conference
Before: Glenn C. Walker, Chair; Steve Moutsatsos, Vice-Chair; and Judy Dirksen, Member.
Appearances:
Herman Turkstra, Counsel for the Appellant
Geoffrey Spurr, Counsel for the Respondent
Michael Terpstra, Witness for the Appellant
DECISION
This is an appeal by the Association of Ontario Chicken Processors (“AOCP”) from a decision of the Chicken Farmers of Ontario (“CFO”) dated May 19, 2023 pursuant to section 16 of the Ministry of Agriculture, Food and Rural Affairs Act, R.S.O. 1990, c. M.16 (“MAFRAA”).
The parties jointly requested an expedited hearing of the appeal as the timing of the Survey, described below, was critical.
The appeal was heard on May 24, 2023. At the conclusion of the hearing, the Tribunal stated that it was declining jurisdiction with reasons to follow. These are our reasons.
Hearing Process
CFO challenged the jurisdiction of this Tribunal to hear this appeal as well as opposing the appeal on its merits.
In order to proceed most efficiently, the Tribunal, with the consent of the parties, determined to hold a bifurcated hearing dealing with the jurisdiction issue first and if then necessary addressing the merits of the appeal.
The Tribunal heard evidence from the appellant’s only witness Michael Terpstra to establish a factual context for argument on the jurisdiction issue. The respondent called no evidence on this issue. The Tribunal then heard submissions from both parties on the issue of the jurisdiction of the Tribunal.
Factual Context
AOCP represents licensed Ontario chicken processors. AOCP is not a local board as defined in the Farm Products Marketing Act, R.S.O. 1990, c. F.9 (“FPMA”).
CFO is a local board as defined in the FPMA and represents all persons in Ontario engaged in producing and marketing chickens.
FPMA Regulation 402 (the “Regulation”) creates the Ontario Chicken Plan and establishes CFO to carry out the terms of the Plan by delegating to and vesting in it certain powers.
Section 17 of the Regulation establishes a Negotiating Agency (“Agency”) of two parties, one of which represents the local board who shall appoint 5 members to the Agency and the other being licensed Ontario chicken processors, here represented by AOCP, who shall also appoint 5 members to the Agency.
Section 18 of the Regulation provides that the Agency may adopt or settle by agreement the minimum live price for chickens for each quota period by applying a formula set out in the Regulation. This formula, known as a Cost of Production Formula (“COPF”), provides that the minimum live price for chickens is equal to the chick price plus feed price and producer margin. Each of these prices is defined in the Regulation. Costs and expenses included in the producer margin are set out in Table 1.
The Agency shall negotiate the chick price and feed price each quota period and each year the Agency shall negotiate the value of each of the costs and expenses described in Table 1.
The data required to update the producer margin is acquired by CFO by way of an Operating Costs Survey (“Survey”) of its members. CFO has the authority to request this information from its members. AOCP does not. The survey is currently conducted by BDO at the request of CFO.
If the Agency does not arrive at an agreement with respect to the values to be assigned to the various parts of the COPF, the issues are referred to arbitration which is governed by section 19 of the Regulation.
There are two methods recognized for setting the price of a regulated product under the FPMA. The first is where the local board sets the price. In this case the Tribunal has jurisdiction to hear an appeal. The second is price setting by a negotiating agency where any dispute concerning pricing goes to arbitration and not to the Tribunal.
This brief but non-exhaustive explanation of the process for the pricing of chicken is provided to give the reader the context for the jurisdictional issue raised by CFO.
The Issues Raised by AOCP On Appeal
- AOCP appeals from a reconsideration decision of CFO dated May 19, 2023. In that decision, CFO decided:
a. To refuse AOCP’s request to capture actual total compensation of third-party labour in the Survey of chicken producers;
b. To refuse AOCP’s request to survey chicken producers not included in the Survey to determine which ones use third-party labour and then to survey those farmers to capture actual total compensation of third-party labour;
c. To refuse to capture payments to chicken producers under the Poultry and Egg on Farm Investment Program (“PEFIP”);
d. To refuse AOCP’s request that CFO collect annual feed cost discounts;
e. To refuse AOCP’s request that CFO collect actual costs data in the Survey;
f. To instruct BDO not to proceed with the Survey without AOCP’s consent.
- The appellant requests of the Tribunal the following remedies:
a. That the Tribunal direct CFO to implement the AOCP requests set out above;
b. That the Tribunal direct CFO to survey all of its producers to determine which producers use third-party labour;
c. That the Tribunal direct CFO to have BDO survey those producers to measure their actual third-party labour costs;
d. That the Tribunal direct CFO to survey the sample of farmers determined by the statistician for annual feed discounts and PEFIP payments;
e. Such other remedies as the Tribunal may determine to ensure that the data to be gathered by CFO is to include all costs of producing chickens not yet surveyed or not agreed to by AOCP.
Analysis and Discussion on the Issue of Jurisdiction
CFO argues that the Tribunal has no jurisdiction to hear this appeal and that only the Ontario Farm Products Marketing Commission (“Commission “) has the authority to regulate this dispute. We agree.
The Regulation provides for the engagement of AOCP in the pricing of chicken only through its participation in the Agency. There is nothing in the Regulation authorizing or requiring a survey to obtain data for the COPF. There is nothing in the Regulation obligating CFO to include certain questions in the Survey or to accede to the requests made by AOCP.
The resolution of these issues lies with the Commission. Any such requirements or obligations may require the amendment of the Regulation that remains within the exclusive jurisdiction of the Commission.
The FPMA provides the Commission with the authority to address this kind of dispute. Section 3(1)(a) states that the Commission may investigate, adjust or otherwise settle any dispute relating to the marketing of a regulated product between producers and persons engaged in marketing or processing the regulated product.
In its reconsideration decision CFO specifically stated that it would hold a hearing to reconsider AOCP’s requests but that it did not concede that it or this Tribunal were the proper avenues for this dispute.
In response, AOCP relies upon section 16(1) of the MAFRAA which provides as follows:
Subject to subsections (4) and (5), a person who is aggrieved by any of the orders, directions, decisions, policies or regulation made under the Farm Products Marketing Act and the Milk Act may appeal the matter to the Tribunal:
Any order, direction, decision or policy made by a Director;
Any order, direction, decision, policy or regulation made by a local board or marketing board;
Any order, direction or decision made by the Commission that applies specifically to the aggrieved person, to a group of persons of which the aggrieved person is a member or with respect to a particular dispute or incident involving the aggrieved person.
The appellant argues that it is entitled to bring this appeal to the Tribunal as it is a decision made by a local board, namely, CFO and that it is plain to see that the Tribunal has jurisdiction under this subsection.
CFO takes the position that this subsection does not give the Tribunal jurisdiction in these circumstances.
The modern approach to the interpretation of statutory legislation requires an analysis which is more than the plain and ordinary meaning of the statute. In Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65 at paragraph 121 the Court states that:
The administrative decision maker’s task is to interpret the contested provision in a manner consistent with the text, context and purpose, applying its particular insight into the statutory scheme at issue. It cannot adopt an interpretation it knows to be inferior – albeit plausible – merely because the interpretation in question appears to be available and is expedient. The decision maker’s responsibility is to discern meaning and legislative intent, not to “reverse engineer” a desired outcome.
The question arises as to whether the CFO decision is a “decision” within the meaning of subsection 16(1)2. The Tribunal’s opinion is that it is not.
We interpret the word “decision” as being a decision made by the primary decision maker which must be a decision that was validly made within the jurisdiction of the primary decision maker. The statutory scheme in these circumstances involves not only the MAFRAA but also the FPMA and the Regulation, all of which must be read together to understand appropriately the context within which the word decision is to be interpreted.
CFO did not concede that it had jurisdiction to reconsider its initial refusal to accept the recommendations of AOCP and, in our view, it did not have such jurisdiction. The next step for AOCP should have been to approach the Commission with these recommendations and not a reconsideration hearing.
If, in fact, CFO did have jurisdiction to reconsider its decision, the decision to reject AOCP’s recommendations was not based on anything mandated in the legislation but was purely discretionary. The Tribunal will refuse to accept jurisdiction where it is asked to fetter or second-guess CFO’s exercise of discretion.
In Sweda Farms Ltd. v. Egg Farmers of Ontario, 2023 ONSC 1990 at paragraph 50, the Divisional Court had this to say about fettering the discretion of a local board:
Consequently, I find this statement of the Tribunal reasonable. “The Tribunal has no jurisdiction to fetter EFO’s discretionary powers or to require that they be exercised by the local board and not by the Tribunal; nor can the Tribunal direct that they be exercised or the manner in which they are exercised.”
The Tribunal finds that the decision which AOCP attempts to appeal lacks validity and therefore that it has no jurisdiction to provide any of the remedies requested by the appellant.
Furthermore, the Tribunal finds that where the pricing of the regulated product is decided using the negotiating agency method, it has no jurisdiction to interfere with the price setting process including what tools the Agency uses to fix the price or how those tools are generated.
AOCP is not without a remedy here. It may seek its remedy from the Commission under section 3(1)(a) of the FPMA.
For these reasons the Tribunal declines jurisdiction and dismisses the appeal.
Released: June 14, 2023