Supreme Court of Canada

Jacobs et al. v. Agricultural Stabilization Board, [1982] 1 S.C.R. 125

Date: 1982-01-26

Theo Jacobs, Edward Jacobs, Joseph Jacobs, Alois Jacobs, Marcel Jacobs, Frans Jacobs and Jacobs Farms Limited Appellants;

and

The Agricultural Stabilization Board Respondent.

File No.: 16112.

1981: December 8 and 9; 1982: January 26.

Present: Laskin C.J. and Martland, Ritchie, Dickson, Beetz, Estey, McIntyre, Chouinard and Lamer JJ.

ON APPEAL FROM THE FEDERAL COURT OF APPEAL

Administrative law—Jurisdiction—Agricultural Stabilization Board—Stabilization subsidies—Apple producers—Whether the Board had authority to fix top and bottom limits on quantities for the subsidy payments—Agricultural Stabilization Act, R.S.C. 1970, c. A-9, as amended by 1974-75-76 (Can.), c. 63, ss. 2(1), 2(2), 4(5), 7, 8, 8.1, 8.2, 9, 10, 11—Apple Stabilization Regulations, SOR/76-518, ss. 4, 5, 6.

The Apple Stabilization Regulations designated apples marketed in 1976 as agricultural commodities for the purposes of the Agricultural Stabilization Act. To achieve the maximum impact of the program on producers, the Board set eligibility limitations for subsidy to apple producers who sold more than 25,000 lbs. and less than 750,000 lbs. Appellants, large producers of apples, contested the Board’s authority to set these limits. The Federal Court held that the limitations were ultra vires the authority of the Board but the Federal Court of Appeal allowed the Board’s appeal, finding such authority implicit in the Board’s power.

Held: The appeal should be dismissed.

The Agricultural Stabilization Act does not introduce a marketing scheme for agricultural commodities but rather envisages positive financial assistance to producers of designated agricultural commodities without restitutionary features. The subsidies were a type of conditional grant and therefore a broad view should be taken of the powers vested in the Board as the administrator of the Act. Even if the Apple Stabilization Regulations did not specify either quantity ceilings or floors, the Board’s duties and powers were sufficient, in the interest of a workable price stabilization program, to set

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quantity limits for the subsidy payments considering the nature of the legislation, the Board’s administrative authority to take the necessary action to stabilize the prices of agricultural commodities and the absence of any preclusion in the Act when the Governor in Council has not dealt with quantities.

British Oxygen Co. Ltd. v. Minister of Technology, [1971] A.C. 610, referred to.

APPEAL from a judgment of the Federal Court of Appeal (1980), 110 D.L.R. (3d) 727, 34 N.R. 325, [1980] 2 F.C. 754, setting aside the judgment of the Trial Division, [1979] 2 F.C. 840. Appeal dismissed.

Burton H. Kellock, Q.C, and Kathryn N. Feldman, for the appellants.

Derek Aylen, Q.C, and Arnold S. Fradkin, for the respondent.

The judgment of the Court was delivered by

THE CHIEF JUSTICE—This is an appeal from a judgment of the Federal Court of Appeal setting aside a judgment of Mahoney J. in the appellant’s favour and dismissing its action for a declaration of its entitlement to subsidy and for mandamus to the respondent Board to requisition from the Minister of Finance payment to the appellant company of the balance of its alleged subsidy entitlement. Although an issue arose in the courts below as to the appropriateness of mandamus, counsel for the respondent Board conceded that the relief sought against the Board could be obtained through a declaration, and hence the question of the proper remedy, if the appellant should succeed in this appeal, became unimportant.

The substantive matters before this Court arise under the Agricultural Stabilization Act, R.S.C. 1970, c. A-9, as amended by 1974-75-76 (Can.), c. 63 and under the Apple Stabilization Regulations, SOR/76-518 of August 9, 1976, promulgated by the Governor in Council under s. 11(6) of the Act. This provision authorizes the Governor in Council to make regulations “prescribing or designating anything that by this Act is to be prescribed or

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designated by the Governor in Council”. In designating apples as an agricultural commodity to be governed by the Act, the Governor in Council was acting pursuant to s. 2(1) of the Act which included in its definition of “agricultural commodity” natural or processed products of agriculture not expressly mentioned but designated by the Governor in Council as an agricultural commodity for the purposes of the Act.

Counsel for the corporate appellant (the proper claimant of subsidy, according to counsel) did not suggest that the Act itself gave an entitlement to subsidy. It was his contention, however, that once a stabilization scheme was propounded and payments were made under it in respect of an agricultural commodity governed by the scheme, other producers of the commodity became entitled to a subsidy payment. I leave this contention aside for the moment and address myself to another major submission of the appellant. That submission goes to the amount of the subsidy and to its assertion that if, as alleged here, there was a failure to impose a legally authorized ceiling on subsidy payments, entitlement to subsidy was open-ended and not limited to the eligible quantities that were allegedly illegally fixed by the Board.

I turn to the legislation and regulations upon which the opposing contentions of the parties, the appellant and the Board, are founded and to the relevant facts.

The Agricultural Stabilization Act, as amended, exhibits its purpose in the preamble which, in its relevant part, reads as follows:

… it is expedient to enact a measure for the purpose of stabilizing the prices of agricultural commodities in order to assist the industry of agriculture to realize fair returns for its labour and investment, and to maintain a fair relationship between prices received by farmers and the costs of the goods and services that they buy, thus to provide farmers with a fair share of the national income;…

The Act establishes a three-person Agricultural Stabilization Board as an agent of the Crown in right of Canada and gives rights of action to and against the Board. A distinction is made between the functions of the Board, set out in ss. 7, 8, 8.1,

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8.2 and 9 and the powers of the Board set out in s. 10. Sections 7, 8, 8.1, 8.2 and 9 are in these terms:

7. (1) The Board shall from time to time

(a) take such action in accordance with this Act as is necessary to stabilize the prices of agricultural commodities at their respective prescribed prices; and

(b) make such recommendations, including recommendations respecting the index referred to in section 8.2 and, after consultation with producer groups, recommendations respecting the powers that may be prescribed under subsection 10(1.1), as are necessary to ensure that the prescribed prices for agricultural commodities in a year bear a fair relationship to the production costs of such commodities in the year.

(2) Action by the Board to stabilize the price of an agricultural commodity under this Act shall be taken in relation to the agricultural commodity or in relation to such grade, quality, variety, class, type or form thereof, and with reference to such place or places, as the Board considers appropriate.

8. In each year the Board shall establish the base price for each agricultural commodity, or the grade, quality, variety, class, type or form thereof, the price of which is to be stabilized under this Act.

8.1 The base price of an agricultural commodity in a year shall be the average price thereof at representative markets as determined by the Board for the five years immediately preceding the year.

8.2 (1) The prescribed price of an agricultural commodity in a year shall be,

(a) in relation to a named commodity, the amount obtained by adjusting ninety per cent, or such higher percentage as the Governor in Council may prescribe, of the base price thereof for the year by an index calculated in such manner as may be prescribed by the Governor in Council to reflect the estimated production costs of the commodity in the year as compared with the average of production costs for the five years immediately preceding the year; and

(b) in relation to a designated commodity, the amount obtained by adjusting such percentage of the base price thereof for the year as the Governor in Council prescribes by the index therefor calculated as described in paragraph (a).

(2) In prescribing a percentage of the base price of an agricultural commodity under paragraph (1)(a) or (b), the Governor in Council shall be guided by the recommendations of the Board made pursuant to subsection

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7(1) and such other factors as the Governor in Council considers to be relevant.

9. (1) Action by the Board under paragraph 10(1)(a), (b) or (c) in relation to an agricultural commodity shall commence at such time in each year as is determined by the Board, and shall continue thereafter for a period of twelve months or, in the case of a designated commodity, for such other period as the Governor in Council prescribes.

(2) The percentage of the base price of a named commodity higher than ninety prescribed under paragraph 8.2(1)(a), and the designation of an agricultural commodity under paragraph (b) of the definition “agricultural commodity” in subsection 2(1), ceases to have effect at the end of the period mentioned in subsection (1) in relation to that commodity.

A number of definition provisions in s. 2(1) of the Act must be referred to for context, as follows:

2. (1) In this Act

“agricultural commodity” means

(a) any of the following commodities produced in Canada, namely, cattle, hogs and sheep; industrial milk and industrial cream; corn and soybeans; and oats and barley not produced in the designated area as defined in the Canadian Wheat Board Act, hereinafter called “named commodity”, and

(b) any other natural or processed product of agriculture (including oats and barley produced in the designated area as defined in the Canadian Wheat Board Act and not marketed through The Canadian Wheat Board) designated by the Governor in Council as an agricultural commodity for the purposes of this Act, hereinafter called “designated commodity”;

“base price”, in relation to an agricultural commodity, means the base price as established under section 8.1;

“Minister” means the Minister of Agriculture;

“prescribed price”, in relation to an agricultural commodity, means the prescribed price as established under section 8.2.

Section 10, detailing the powers of the Board, reads:

10. (1) Subject to and in accordance with any regulations that may be made by the Governor in Council, the Board may

(a) purchase any agricultural commodity at the prescribed price;

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(b) pay to producers of an agricultural commodity, directly or through such agent as the Board may determine, the amount by which the prescribed price exceeds a price determined by the Board to be the average price at which the commodity is sold in such markets and during such periods as the Board considers appropriate;

(c) make such payment for the benefit of producers as the Governor in Council may authorize for the purpose of stabilizing the price of an agricultural commodity at the prescribed price;

(d) sell or otherwise dispose of, package, process, store, ship, transport, export, insure or otherwise deal in any commodity purchased by the Board under this section;

(e) enter into contracts or appoint agents to do anything authorized under this Act;

(f) purchase at the request of any department or agency of the Government of Canada any agricultural commodity required by such department or agency;

(f.1) by order require any person to give, at the time specified in the order, such information respecting agricultural commodities as may be necessary for the proper administration of this Act; and

(g) do all such acts and things as are necessary or incidental to the exercise of any of its powers, duties or functions under this Act.

(1.1) For the purpose of stabilizing the price of an agricultural commodity, the Board may exercise such other powers as are prescribed by the Governor in Council, upon the recommendation of the Board, for that purpose.

(2) For the purpose of stabilizing the price of an agricultural commodity, the Board may exercise all or any of its powers under this section in relation to any food product thereof, and for the purposes of this section the expression “prescribed price” in relation to such food product shall be construed to be such price as is determined by the Board to be proportionate to the prescribed price for such agricultural commodity.

(3) The Board may make rules for the regulation of its proceedings and the performance of its duties and functions under this Act.

There are three other provisions of the Act of which account must be taken, namely, s. 2(2), s. 4.(5) and s. 11. They are, respectively, as follows:

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2. (2) The powers, duties and functions conferred by this Act may be exercised in relation to an agricultural commodity throughout Canada or in any region of Canada when, in the opinion of the Governor in Council, the market situation for the agricultural commodity in that region is substantially different from the market situation therefor in the rest of Canada.

3. (5) The Board shall comply with any directions from time to time given to it by the Governor in Council or the Minister respecting the exercise or performance of its powers, duties and functions under this Act.

4. The Governor in Council may make regulations,

(a) establishing ceilings on the quantity or value of an agricultural commodity eligible for price stabilization under this Act;

(b) prescribing or designating anything that by this Act is to be prescribed or designated by the Governor in Council; and

(c) generally for carrying out the purposes and provisions of this Act.

There is also a ceiling on the pay-outs under the Act, prescribed by s. 13, which limits them (apart from salary, travel and administration expenses) to 250 million dollars, payable out of the Consolidated Revenue Fund.

The Apple Stabilization Regulations, applicable to apples marketed in 1975-76, were promulgated by the Governor in Council pursuant to ss. 2(1), 8.2(1), 9(1), 10(1)(b) and 11 of the Act. The Regulations designated apples sold as fresh apples or as peelers as an agricultural commodity for the purpose of the Act, and so too apples sold for juice, juice concentrate or vinegar. Sections 4 and 5 of the Regulations governing the prescribed price and payments to producers were as follows:

4. The prescribed price for apples sold as fresh apples or peelers and apples sold for juice, juice concentrate or vinegar shall be the aggregate of

(a) ninety per cent of the base price thereof; and

(b) the index applicable thereto calculated in the manner set out in the Production Cost Index Regulations.

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5. (1) The Board may make payments to producers of

(a) 2.1 cents per pound of apples sold as fresh apples or peelers, and

(b) 0.9 cent per pound of apples sold for juice, juice concentrate or vinegar,

for the purpose of stabilizing the price of such designated commodities at the prescribed price.

(2) Payments made pursuant to subsection (1) shall be paid directly by the Board or through such marketing agency as the Board may determine in respect of apples grown during the 1975 crop year and marketed on or before August 31, 1976, where the Board is satisfied as to the designated commodity that such apples comprise.

Under s. 6, payments pursuant to s. 5 were to be made during the period commencing on the in-force date of the Regulations and terminating on March 31, 1977.

It will be seen that there is nothing in the Apple Stabilization Regulations which limits the quantities of apples or derivatives thereof that are eligible for subsidy payments. The Regulations were submitted to the Treasury Board for approval by the Minister of Agriculture who accompanied them with the following statement:

Eligibility limitations have been set at 25,000 lbs. to 750,000 lbs. to achieve the maximum impact of the support program on producers, ensuring that the main direction of the support program is towards the medium size efficient fulltime producer [sic] rather than smaller parttime [sic] operators and limiting the assistance to those very large producers who are better able to cope with the economic vagaries of the market place than the average.

The Board adopted these quantity limits at a meeting held on July 8, 1976 and they were repeated in a press release of August 9, 1976, issued a few days after the promulgation of the Regulations. Claim forms for the subsidy were distributed to producers early in September, 1976. On the face of the form was the following notice:

Please note that claims will be accepted if the total quantity of apples marketed exceeds 25,000 lbs. to a maximum of 750,000 lbs.

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Representations to the Board by certain trade associations resulted in an increase, decreed at a Board meeting on December 24, 1976, in the maximum eligibility for subsidy to producers where two or more partners were involved. The minimum and maximum quantities were made applicable to up to three partners. The appellant was first paid $15,750 as a subsidy for 750,000 lbs. As a result of the decreed increase, two more payments of that amount were made, to a total of $47,250. It is common ground that the unpaid subsidy entitlement claimed from the Board, based on a production in excess of 750,000 lbs., is $54,973.99 and not $70,719.09 which was claimed originally.

The Judgments in the Federal Court

In his reasons for judgment in favour of the now appellant, Mahoney J., [1979] 2 F.C. 840, concluded that nothing in the Act made payment of a subsidy an ex gratia matter. Again, in his view, the annual limitation of 250 million dollars on expenditures by the Board under s. 13(5) of the Act did not vest the Board with authority to limit producers’ eligibility for subsidy, especially when this limitation could be exceeded by a supplementary appropriation by Parliament, as in fact happened in the fiscal year ending March 31, 1977. Contrary to the submission of the Board which invoked s. 4(5) of the Act to support the limits on quantities eligible for subsidy, the learned trial judge held that that provision (referring to the Minister’s direction) could not vest the Board with any power or duty or function which it did not already have. Mahoney J. also found that the absence of the word “quantity” from s. 8 of the Act was significant. Taken together with the power to prescribe quantities vested in the Governor in Council by s. 11(a) of the Act, the conclusion followed that the Board itself had no power to put a ceiling or a floor on quantities eligible for subsidy. Section 10(1)(g), empowering the Board to do all such acts or things necessary or incidental to the exercise of any of its powers, duties or functions under the Act was a dependent not an

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independent provision.

In the result, Mahoney J. held that since the Board had no power to limit or prescribe quantities, the appellant company was entitled to a declaration in its favour for the total unpaid subsidy to which it claimed entitlement.

The Federal Court of Appeal, [1980] 2 F.C. 754, in reasons by Ryan J.A., allowed the Board’s appeal and dismissed the action. It saw the critical question to be whether the Board had authority to set eligibility limits on quantities. It found such authority implicit in the Board’s power, more properly duty, under s. 8 to establish in each year the base price for each agricultural commodity or the grade, quality, variety, class, type or form thereof, the price of which is to be stabilized under the Act. Ryan J.A. said this in that connection [at p. 764]:

The Act envisages that the Board may wish to stabilize prices, not merely of commodities as such, but of particular grade, qualities, varieties, classes, types or forms of commodities, possibly having in mind that distinct markets may exist in relation to different subgroups. That was in fact done in this case: a distinction was made between fresh apples and apples for juice, and a separate price was designated for each type. To refer in subsection 7(2) and in section 8 to subgroups in terms of grade or quality, without also mentioning quantity, does not, with respect, as I read the provisions, indicate an intention to exclude the Board from taking action in relation to quantities of a type of commodity in relation to which a base price has been established and a price designated.

He then referred to the Minister’s indication, in making his submission to the Treasury Board, that the purpose of fixing minimum and maximum limits on quantities was to ensure that the main direction of the support program would be towards the medium and efficient full-time operators rather than to the smaller part-time operators and that assistance would be restricted in respect of the very large producers who were better able to cope with market vagaries than the average. The secre-

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tary-manager of the Board, in his evidence, confirmed this to be a consideration in the fixing of the sum of money to be made available for subsidy payments.

Ryan J.A. concluded his reasons as follows [at pp. 764-65]:

I have already indicated my view that it is open to the Board to set minimum and maximum limits within which payments may be made in implementation of a price stabilization program. Such limits must, however, be limits designed to implement price stabilization and not to promote an unrelated purpose. The problem, as I see it, is whether the setting of the limits in relation to the apple price stabilization program for the purposes indicated had the effect of transforming the program into something other than a program to stabilize the prices of the designated commodities at the prescribed prices.

After some hesitation, I have concluded that the limits did not have this effect. The program remained in essence a program designed to stabilize the prices of designated commodities at the prescribed prices. The preamble to the Act indicates that the purpose of price stabilization programs is to assist “the industry of agriculture” to realize fair returns for its labour and investment. A purpose of such programs is “to maintain a fair relationship between prices received by farmers and the costs of the goods and services that they buy, thus to provide farmers with a fair share of the national income”. In my view, the limits set by the Board, considered in the light of the purposes of these limits and the statutory purposes of agricultural price stabilization, were such as to be permissible. They did not have the effect of transforming the price stabilization program for apples into something else.

Earlier in his reasons, he disagreed with the trial judge’s view of the Governor in Council’s powers under s. 11(a), holding that it was a power to set outer limits on quantity or value and leaving room for the Board to set limits, within any ceiling fixed by the Governor in Council, beyond which producers may not be paid subsidy. At the same time, he rejected the contention that s. 7(2) as well as s. 8 indicated that the Board’s powers were not to extend to fixing eligible quantities.

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It seems to me that the learned Justice of Appeal also found support for the Board prescription of quantities in s. 7(1) and in s. 10(1), although he is not as explicit on the scope of these provisions as he is on the scope of s. 8. Nonetheless, it is desirable to quote what he said as to s. 7(1) and s. 10(1), as follows [at pp. 761 et seq.]:

Once a price is prescribed for an agricultural commodity, the Board, by virtue of subsection 7(1) of the Act, is under a duty “… to take such action in accordance with this Act as is necessary to stabilize …” the price of the commodity at the prescribed price. The duty is imposed on the Board, not on the Minister or the Governor in Council. It is true that the Minister or the Governor in Council may give the Board instructions on which the Board must act. But the statutory duty to stabilize is a duty imposed on the Board itself.

The Act vests the Board with powers by means of which to carry out its mandate. These are set out in paragraphs (a), (b) and (c) of subsection 10(1). They are supplemented by the authority, granted to the Board by paragraph (g) of the subsection, to “do all such acts and things as are necessary or incidental to the exercise of any of its powers, duties or functions” under the Act.

It would seem to me that the Board might well decide, in implementing the powers vested in it by subsection 10(1), paragraphs (c) and (g), that it would be desirable or even necessary to place limits on the quantities of the commodity in respect of which it was about to make payments. The Board might decide, as it did in this case, to establish quantitative limits in respect of individual producers if it was aware, as it was here, of the estimates of the costs of a program as approved by Treasury Board…

The Board might also consider it prudent under some programs to establish a minimum quantity as a test of eligibility for the purpose of avoiding a large number of very small claims of little more than nuisance value.

Stabilization Program not a Marketing Scheme

Although the Board is empowered under s. 10(1)(a), in accordance with any regulation of the Governor in Council, to purchase any agricultural commodity at the prescribed price and, under s. 10(1)(d), to sell or deal in any agricultural com-

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modity so purchased, the Act does not introduce a marketing scheme for agricultural commodities. It is desirable to make this point because of the contention of the appellant that the purpose of the Act was to stabilize market prices and not to protect certain groups of producers at the expense of other groups; in short, discriminatory practice was outside of the purview of the statute. If this is meant to preclude the selection of particular beneficiaries of a subsidy program from among the undifferentiated number of producers of an agricultural commodity it is an untenable proposition. The stabilization program is not directed to consumers. Producers are not required to sell their products at fixed or designated prices. Rather there is a framework for monetary assistance to producers to enable them, as producers, to realize fair returns on their investment notwithstanding the increase in production costs which they might ordinarily try to recoup through market action, that is by raising their prices. Since there is no entitlement to subsidy until a scheme is propounded by the Governor in Council and until action is taken under the scheme by inviting the presentation of claims for subsidy, it is surely open to the proper authorities to designate the producers, according to authorized standards, who may be entitled to the benefits of the stabilization program.

In the present case, it is unnecessary to determine whether the Board has an unfettered discretion to refuse payments to producers within the program by reason of the stipulation in s. 5(1) of the Regulations that “the Board may make payments to producers”. The Board, like other statutory bodies, has a duty to act fairly, and since it has implemented the apple stabilization program by inviting applications for subsidy and making payments accordingly, it must act on such applications in the same way for all producers who meet the eligibility requirements properly fixed to entitle them to subsidy.

This, of course, brings the matter back to the question of eligibility, based by the Board on

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quantities, in pursuance apparently of a ministerial directive. The Act clearly contemplates that ceilings might be imposed to limit eligibility and the question is whether it is s. 11 (a) of the Act alone that can lawfully support quantity limitations on claims to subsidy. In approaching this question, one of the construction of the powers vested in the Board, in the Minister and in the Governor in Council, it is a relevant consideration that the Agricultural Stabilization Act is not a restrictive statute, not one that interferes in any direct way with existing legal rights of producers or members of the public, but rather a statute that envisages positive financial assistance to producers of designated agricultural commodities and without restitutionary features. The subsidies are in fact a type of conditional grant, and I do not, therefore, understand the observation of the trial judge that payment of a subsidy is not an ex gratia matter. It certainly is, in inception at least. This persuades me that a broad view should be taken of the powers vested in the agencies involved in the operation of the Act and, especially, of the powers vested in the Board as the administrator of the Act.

Authority to Prescribe Eligible Quantities

Although there were discretions vested in the Board in its administration of the Act as, for example, in s. 10(1) (“Subject to and in accordance with any regulations […], the Board may” etc.) and in s. 5(1) of the Apple Stabilization Regulations (“The Board may make payments to producers…” etc.), I would not regard them as a support for the imposition of quantity limits. Indeed, there is a good case to be made for giving an imperative connotation to these discretions once a stabilization scheme becomes operative. If the Board has power to establish quantity limits, it must be found elsewhere in the Act.

I do not view the duty assigned to the Board under s. 7(1)(a) in the same light. A different kind of discretion is reflected in its language that “the Board shall from time to time take such action in

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accordance with this Act as is necessary [the italics are mine] to stabilize the prices of agricultural commodities at their respective prescribed prices”. Section 7(2) carries the reference to action further by specifying that “[it] shall be taken in relation to the agricultural commodity or in relation to such grade, quality, variety, class, type or form thereof, and with reference to such place or places, as the Board considers appropriate”. Moreover, these two provisions have to be read along with s. 10(1)(b) and along with s. 9(1). It is worth repeating the terms of these provisions which are:

10. (1) Subject to and in accordance with any regulations that may be made by the Governor in Council, the Board may

(b) pay to producers of an agricultural commodity, directly or through such agent as the Board may determine, the amount by which the prescribed price exceeds a price determined by the Board to be the average price at which the commodity is sold in such markets and during such periods as the Board considers appropriate;

9. (1) Action by the Board under paragraph 10(1)(a), (b) or (c) in relation to an agricultural commodity shall commence at such time in each year as is determined by the Board, and shall continue thereafter for a period of twelve months or, in the case of a designated commodity, for such other period as the Governor in Council prescribes.

Unless the Board is given directions by the Minister or by the Governor in Council pursuant to s. 4(5) of the Act “respecting the exercise or performance of its powers, duties and functions under this Act”, and, of course, subject also to regulations by the Governor in Council, its broad powers under s. 7(1)(a) to take such action as is necessary to stabilize prices of agricultural commodities at their respective prescribed prices remain unfettered. True, these powers are to be exercised in accordance with the Act, which simply brings into account s. 4(5) and the regulation-making authority of the Governor in Council under s. 11(a).

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It is this last mentioned authority which, coupled with the absence of any explicit mention of quantities elsewhere in the Act, is at the base of the trial judge’s decision and of the contentions of the appellant. Section 11(a) deserves repeating:

11. The Governor in Council may make regulations,

(a) establishing ceilings on the quantity or value of an agricultural commodity eligible for price stabilization under this Act;

What is significant to me about this provision is that it does not mention floors, only ceilings, nor are floors mentioned elsewhere in the Act. The contention of the appellant must go so far as to deny authority to the Board to fix floors, here the 25,000 lb. floor limit, and hence to preclude it from subtracting this quantity before measuring entitlement to subsidy. In the light of the Board’s duty to take such action as is necessary (that is necessary in the view of the Board, subject to such direction as may be given by the Minister or Governor in Council) to stabilize the price of an agricultural commodity, I find it unreal to suggest that the Board cannot, in discharging this duty, hive off small producers or hobby farmers whose production would not, in the Board’s view, assist in stabilizing prices. If, as seems to me to be the case, the Board can fix a minimum, why not a maximum beyond which assistance, again in its view, is not needed to achieve price stabilization?

I do not think that the Act can be properly understood without taking into account the process or the procedures which lead to a price stabilization scheme. The Regulations involved in this case were promulgated on the recommendation of the Minister of Agriculture and the Treasury Board. Not all the stabilization schemes (a number of which I have examined) refer to the Treasury Board. For example, the Barley Stabilization Regulations, 1977-78, SOR/79‑542 of July 26, 1979 do not refer to the Treasury Board. Nor do the Hog Stabilization 1979-80 Regulations, SOR/80-515 of July 7, 1980. On the other hand, the Potato Stabilization Regulations, 1977, SOR/ 78-445 of May 12, 1978 refer to the Treasury

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Board as well as to the Minister of Agriculture. It is obvious, from the fact that the initial presentation of the Minister in respect of the proposed apple stabilization program was to the Treasury Board, that the financial outlay to support the subsidy program was an important matter. I have already referred to the Minister’s statement to the Treasury Board but the record shows that the Agriculture Stabilization Board adopted, if indeed it did not initiate or propose the minimum and maximum eligible quantities which the Minister put before the Treasury Board. A press release from the Minister’s office was made concurrently with the promulgation of the Apple Stabilization Regulations and it mentioned the minimum and maximum quantity limits as well as other features of the program, including the subsidy allowances.

The Apple Stabilization Regulations do not specify either quantity ceilings or floors. Some of the programs for other agricultural commodities do contain ceilings; for example, the Hog Stabilization 1979-80 Regulations, referred to earlier, and also the Potato Stabilization Regulations, 1977, also referred to above. What then is the effect of the failure or omission of the Governor in Council to establish a ceiling on quantity under the Apple Stabilization Regulations? In view of what went on before the Regulations were promulgated, this was a calculated omission and it must have been considered that the Board could fix floors and ceilings, either suo motu or at the direction of the Minister. If the Governor in Council had fixed a ceiling, I do not see that it would have been open to the Board to operate on a lower ceiling as Ryan J.A. suggests; the Governor in Council’s ceiling would be the operative one.

However, since the matter was left open, I am of the opinion that the Board’s duties and powers were sufficient to enable it, in the interests of a workable price stabilization program, to set quantity limits below which and above which the subsidy fixed in the Regulations would not be paid. No doubt, the Act could have been more precise

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on the matter but, given the nature of the legislation and the administrative authority vested in the Board and the absence of any preclusion in the Act when the Governor in Council has not dealt with quantities, I would not deny the Board the right to fix top and bottom limits for the subsidy payments.

The Court was referred, during the course of the argument, to various authorities, but I do not find any of them to be helpful in this case, one of first impression. British Oxygen Co. Ltd. v. Minister of Technology, [1971] AC. 610, relied on by the respondent, deserves, however, a mention. In that case, the relevant legislation empowered the Board of Trade (which was replaced by the Minister of Technology) to make grants (“may make grants”) to any person carrying on business in Great Britain in respect of capital expenditure in providing new machinery or plant for use in the business for carrying on a “qualifying industrial process”, as defined in the legislation. The House of Lords, affirming the Court of Appeal, could find no limitation on the Minister’s discretion to grant or refuse a grant to persons meeting the prescribed conditions of eligibility. No policy was indicated for the Minister to follow in exercising his discretion. Thus, it was open to the Minister to deny a grant on any item of plant costing less than £25, unless used in conjunction with other items. As Lord Reid put it, there were only two limitations on the unqualified exercise of discretion; the Minister must act in good faith and its discretion must not be so unreasonably exercised as to show that there cannot have been any real or genuine exercise of the discretion. I am bound to agree with counsel for the appellant that the British Oxygen case deals with legislation of a different order, much different from that in the present case.

Here, the question whether a subsidy will be paid is not left to uncontrolled administrative discretion, but stems from the promulgation of a

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program in pursuance of the Agricultural Stabilization Act and in accordance with its provisions. This being said, however, the terms of the Act and applicable Regulations must be construed to determine what powers and authority are vested in the Agricultural Stabilization Board. For the reasons I have given, the Board did not transgress any applicable limitations on those powers and authority. I would, accordingly, dismiss this appeal with costs.

Appeal dismissed with costs.

Solicitors for the appellants: Blake, Cassels & Graydon, Toronto.

Solicitor for the respondent: R. Tassé, Ottawa.