Rein Minnema, Huron County Pork Producers Association, Toni and Rita Felder, and District 10, 11, and 12 Pork Producers,, respectively, vs. Ontario Farm Products Marketing Commission (Interim Decision)

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: Appeals to the Agriculture, Food and Rural Affairs Appeal Tribunal of a decision of the Ontario Farm Products Marketing Commission, dated October 6, 2008, regarding the Ontario Pork Producers' Marketing Board;

Aand in the matter of: A Pre-Hearing Conference pursuant to Rule 24 of the Tribunal's Rules of Procedure held April 17, 2009, at the Ramada Hotel, Guelph.

Before:
Marthanne Robson, Vice Chair

Appearances:

• Ontario Farm Products Marketing Commission (Commission) represented by John Fitzgerald and counsel, Sara Blake

• Rein Minnema represented by agent, Elbert van Donkersgoed

• Fields Farms Ltd. represented by Rita Felder

• Huron County Pork Producers' Association represented by Grant Love, John Vander Burgt and counsel, Rob Shapiro

• Districts 10, 11 and 12 Pork Producers represented by Tom Watpool, Bruce Hudson and Rob de Wolde

• Conestoga Meat Packers/Progressive Pork Producers (Conestoga 3P) represented by Bob Hunsberger

• Maple Leaf Consumer Foods (Maple Leaf) represented by Don Davidson, Cathy Aker

• Ontario Pork Producers' Marketing Board (Ontario Pork) represented by Wilma Jeffray and counsel, Sean Foran

• The Open Marketing Group (OMG) represented by Brian Simpson and counsel, Geoffrey Spurr

• Quality Meat Packers represented by Sheldon Garfinkle

• Synergy Swine, Paragon Farms, and RFW Farms (Synergy et al.) represented by Rob McDougall, James Reesor and Wendy Fiefert

• Zantingh Direct Inc. and Zantingh Swine Inc. (Zantingh) represented by Brad Zantingh and counsel, Nicholas Richter

Interim Decision of the Tribunal

Preliminary Matters

1. Synergy Swine requested a change from status as an intervenor to a party. There was no objection and the Tribunal granted the request.

2. The Tribunal confirmed that Gloria Marco-Borys, Tribunal Coordinator, has delegated all her regular duties for these appeals to Tribunal Assistant, Alan Wiebe. The Tribunal will provide a copy of the confirming document on request.

Stay of the Commission's decision

3. At the continuation of the Pre-Hearing Conference on April 17, 2009, the Tribunal heard two motions to lift, limit or define the scope of the statutory stay of the Commission's October 6, 2008, decision. That Commission decision significantly changed the mandate and powers of Ontario Pork from single desk marketing to a more open market.

4. The Commission argued that the stay should be lifted, or in the alternative partially lifted, and was supported by these parties: Conestoga 3P, Maple Leaf, Quality Meat, and Synergy Swine. The OMG supported an order limiting the stay in the manner proposed by the Commission, or in the alternative, an order limiting the stay in the manner proposed by Ontario Pork.

5. Ontario Pork argued that the stay should be limited in order to allow it to implement certain portions of the decision. Zantingh, and Districts 10, 11 & 12 largely supported the position of Ontario Pork. The Huron County Pork Producers' Association (HCPPA) sought an order limiting the stay as requested by Ontario Pork, except without continuation of the restructured Hog Industry Advisory Committee or implementation of a new governance structure. Mr. Minnema and Fields Farms made submissions against any lifting or limiting of the stay.

6. Filing an appeal of the Commission's decision operates as a statutory stay. However, the Tribunal may limit or define the scope of the stay.

7. The relevant portions of the Ministry of Agriculture, Food and Rural Affairs Act (MAFRA) state:

   16. (1) Subject to subsection (4), if a person is aggrieved by an order, direction, policy or decision of the Commission or Director, made under the Farm Products Marketing Act or the Milk Act, that person may appeal to the Tribunal by filing with the Tribunal and sending to the Commission or Director written notice of the appeal.

   (6) Where, by virtue of subsection 25(1) of the Statutory Powers Procedure Act, an appeal under subsection (1) or (2) operates as a stay in the matter, the Tribunal may limit or define the scope of the stay.

8. Section 25(1) of the Statutory Powers Procedure Act states:

   25.(1) An appeal from a decision of a tribunal to a court or other appellate body operates as a stay in the matter unless,
   (a) another Act or a regulation that applies to the proceeding expressly provides to the contrary; or
   (b) the tribunal or the court or other appellate body orders otherwise.

Test to limit or define the scope of the statutory stay

9. The statutory provisions do not specifically refer to "lifting" a stay. Submissions at the pre-hearing conference proceeded under the assumption that the Tribunal has the authority not only to limit or define the scope of the stay, but also lift it entirely.

10. No one was able to refer the Tribunal to a case which sets out a test for limiting or defining the scope of a statutory stay. The parties who cited case law agreed that RJR Macdonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311 sets out the appropriate test for granting a stay of a decision where there is no statutory stay.

11. Mr. Spurr, counsel for the OMG provided a copy of the Harry McBride Pre-hearing Decision, dated December 23, 2003, in which this Tribunal lifted a s. 16(6) MAFRA Act statutory stay. There was no discussion of whether the Tribunal had authority to lift the stay. The decision referred to Mr. Spurr's submission (he was also counsel in that case) that RJR MacDonald sets out the appropriate test. The decision did not refer to any other argument on the issue. Mr. McBride, the respondent to the motion, was unrepresented.

12. There is no language in s. 16(6) of the MAFRA Act or s. 25(1) of the SPPA to suggest a restriction on the extent to which the stay may be limited or its scope defined. It may be that the word "limit" the stay also means "lift" the stay; or that to "define the scope of the stay" includes the discretion to define the scope as "nil". For the purposes of this case, the Tribunal will proceed on the basis that the legislation confers discretion to lift the stay in its entirety.

13. The issue is then, what is the test applicable for the exercise of discretion by the Tribunal to lift, limit or define the scope of the stay.

14. The Court in RJR MacDonald adopted a three-part test which requires that an applicant demonstrate the stay should be granted because:

    1. There is a serious issue to be tried.

    2. The applicant will suffer irreparable harm if the stay is not granted.

    3. The balance of inconvenience favours the applicant and/or the public interest.

15. The Commission submitted the test for revoking the stay is the same in this case, except to place the onus on the respondents rather than on the appellants. Ontario Pork accepted the proposition that the onus is clearly on the party seeking to vary or lift the stay to justify the basis upon which the stay should be lifted.

16. The Commission referred to Connelly v. Ontario (Health Services Restructuring Commission) [1997] O.J. No. 129 and Algonquin Wildlands League v. Ontario (Minister of Natural Resources) [1996] O.J. No. 3355 (Div. Crt.) as cases in which the circumstances were similar to the situation in this case.

17. Ontario Pork counsel argued those cases, especially the RJR Macdonald case, do not apply. They are cases where parties were seeking a stay pending the outcome of their challenge to regulations. In this instance the legislation has automatically imposed a stay; the opposite of what courts were dealing with in RJR Macdonald and subsequent cases cited by the Commission.

18. The Tribunal notes that, in the Connelly and Algonquin Wildlands cases, the public interest at issue was the risk to health and safety of the public. No one has argued that there is any issue of public health and safety involved in the Commission decision.

19. In order to determine whether the statutory stay should be lifted, the three elements set out in the RJR MacDonald case should be examined, however, using a different vantage point than in the case of a motion seeking a non-statutory stay.

    1. Serious issue to be tried.

    2. Irreparable harm to the applicant or to the public interest if the stay is not lifted.

    3. The balance of inconvenience favours the applicant and/or the public interest.

Serious Issue

20. In this case, the Tribunal decided there was a serious issue to be tried when it denied the Commission's motion to dismiss the appeals in its Interim Decision dated March 13, 2009, following the first day of this Pre-Hearing Conference.

21. That does not end the examination of whether the statutory stay ought to be lifted, limited or defined in scope. Even if there is a serious issue to be tried, the questions of irreparable harm and balancing of interests must be examined in order to determine whether the Tribunal ought to exercise its legislated discretion.

Irreparable harm

22. The Commission argued that there was no evidence that the implementation of the decision would cause the appellants irreparable harm. That is not what needs to be demonstrated. Instead, parties seeking an order lifting the stay must demonstrate that not granting the order will cause them or the public interest irreparable harm.

23. The Commission argued that it is a public body with regulatory making responsibility and its decision represents the public interest in this matter. It submitted that its decision was the correct one because it had done its best to involve the whole industry in its hearing and considered all the evidence before it regarding the issues it set out in its notice of hearing.

24. The Commission also argued that the Tribunal should show deference to the Commission's decision because of the Commission's narrow and specialized mandate, compared with the broader and more general mandate of the Tribunal. The Commission made arguments that its decision was long overdue, and that it was contrary to the public interest to maintain the statutory stay leaving long-standing problems in the Ontario pork industry to "fester". The Commission argued these considerations constituted irreparable harm and outweighed the appellants' concerns.

25. The Commission, however, provided no evidence of what irreparable harm the pork industry would suffer if the stay was not lifted.

26. The Commission recognized in its submissions that if the Tribunal reversed its decision on appeal, or decided to restructure the pork industry in some other way, the Tribunal's decision would take effect unless the Minister elected to exercise their powers under section 18 of the Ministry of Agriculture, Food and Rural Affairs Act (MAFRA Act).

27. Ontario Pork argued to limit the stay to allow it to continue with work that was already underway as part of its strategic planning process. Ontario Pork filed an affidavit by Lloyd Bauernhuber, Director of Finance of Ontario Pork, stating that the organization may incur costs of approximately $3 million to implement the decision consisting of employee severance, fixed asset write-offs, building reconfiguration and the modification of computer systems. Ontario Pork cited this as evidence of irreparable harm.

28. Mr. van Donkersgoed, on behalf of Mr. Minnema, argued that his client would suffer irreparable harm because he would be required to use the services of an agent should the proposed new structure be implemented pending the appeal. That is a misreading of the Commission decision. Producers would still have the option of marketing their hogs through Ontario Pork.

Irreparable Harm and the Public Interest

29. The Court, in RJR Macdonald, said that the test of irreparable harm to the public interest "will nearly always be satisfied upon proof that the authority is charged with the duty of promoting or protecting the public interest and upon some indication that the impugned legislation, regulation or activity was undertaken pursuant to that responsibility. Once these minimal requirements have been met, the court should in most cases assume that irreparable harm to the public interest would result from the restraint of that action." (par.71)

30. What then is the public interest and who speaks for it? A careful reading of the RJR MacDonald case reveals that the underlying substantive appeal was a challenge to the constitutionality of the legislation/regulation. There has been no Charter or constitutional argument made in the case.

31. The Commission clearly has a role in policy-making. In a footnote (1) to its decision, the Commission stated: "It is important to note that this is not an adjudicative proceeding. The purpose of this proceeding is to determine regulatory policy questions that are of importance to the pork industry as a whole". Its policy-making role is to be exercised in the public interest.

32. The Commission asks the Tribunal to accept that, because the Commission's policy-making role is to be exercised in the public interest, it paves the way for a finding that leaving the stay in place would cause irreparable harm to the public interest. The Commission's focus on the test in RJR overlooks the MAFRA Act which is the governing statute to both the Tribunal and the Commission.

33. If "in most cases" staying a Commission decision would cause irreparable harm to the public interest why is there a statutory stay? To accept the Commission's argument the Tribunal would have to ignore or "read out" subsection 16(6) of the MAFRA Act. The Tribunal heard no evidence or argument that subsection 16(6) is ambiguous, or unconstitutional. The Tribunal finds that the words used by the legislature leave no reasonable doubt about its meaning or intention and therefore cannot be ignored.

34. The test in the RJR case originated in a Charter case and is applied to the granting of common law stays. To apply the test where there is a statutory stay negates a clear and unambiguous statute. The Tribunal does not accept that leaving the stay of the Commission decision in place would, in and of itself, cause irreparable harm. There was no other evidence of irreparable harm to a party should the statutory stay remain pending the appeal decision.

Balancing of interests

35. Having determined that there is no irreparable harm should the stay remain in place, the Tribunal will nonetheless move on to the third part of the test, the balancing of interests and examine what outcome is in the public interest.

36. In Roosma v. Ford Motor Co. Of Canada Ltd.[1988] O. J. No. 3114 (HCJ) the Divisional Court noted: "Courts are reluctant to lift statutory stays, in my opinion properly, for any other approach could render nugatory section 25 of the SPPA."

37. The Commission recognized that the Tribunal could reverse the decision. The question is, is it in the public interest to maintain the stay, or to lift the stay, allowing the decision to be implemented, and then possibly change everything back. The reluctance expressed in Roosma, provides guidance to the Tribunal in its determination about whether to grant the Commission's motion to lift the stay.

38. The Commission and those supporting its motion to lift the stay have not persuaded the Tribunal that it is in the public interest to allow the decision to proceed, and lift the statutory stay. While the pork industry is anxious for a final determination on the issues at hand, in the Tribunal's opinion, it is in the public interest to follow the statutory scheme

39. Accordingly, the stay will not be lifted. The next issue is to determine whether the stay should be limited or its scope defined.

Whether to limit or define the scope of the stay

40. The Commission decision is contained in the following paragraphs:
    

    1. Effective immediately, the requirement for Ontario Pork to review and approve direct supply contracts negotiated between buyers and sellers is revoked. Ontario Pork may continue to review and approve direct supply contracts negotiated between buyers and sellers if requested by either party.

    2. Ontario Pork will retain the authority to offer marketing services, including logistics, scheduling, and settlement of payment and to collect a service fee for those services, but these services shall not be mandatory and the service fee would be collected from those who choose to use the services.

    3. Ontario Pork will retain the power to collect and disseminate price information on market hog sales in an aggregate manner.

    4. Producers may choose to continue to market their pigs through whatever methods Ontario Pork offers including pooled sales or board negotiated contracts.

    5. Producers shall have the option to enter into supply contracts with processors, make spot sales to buyers, sell through other agents or use any other method they wish to use to market their hogs.

    6. The commission finds that scheduling, logistics and settlement decisions should be decided between the buyer and seller.

    7. The commission will revoke paragraph 5(j) in section 5 in Regulation 419.

    8. The commission will revoke section 9 in Regulation 419.

    9. The commission will revoke the exemptions in section 3 in Regulation 419 for hogs marketed for any purpose except slaughter, such that Ontario Pork will have authority to collect a fee on all classes of domestic swine produced in Ontario. All producers will financially support the delivery of industry services.

    10. The commission hereby orders Ontario Pork to develop an implementation plan to move from a mandatory marketing organization to one offering producers choices in marketing methods, and to return to the commission with a preliminary plan by January 15, 2009 and a completed plan by March 1, 2009. Ontario Pork shall consult with all interested industry stakeholders in the establishment of this plan.

    11. The commission orders Ontario Pork to return to the commission with a plan on how it would collect appropriate charges for industry services and what it proposes to be the nature and scope of its mandate for industry services. Ontario Pork is to consult with its membership, and industry stakeholders in developing this plan.

    12. The commission will appoint a new chair to the Hog Industry Advisory Committee and will seek the appropriate representation from the industry.

    13. Ontario Pork is hereby ordered to complete consultations with its members and return to the commission with a proposal to align its governance model with the current industry size and structure by December 1, 2008.

41. Ontario Pork requested that it be allowed to implement what it referred to as "uncontroversial" portions of the Commission decision, and continue certain work already underway. These are set out in its materials:

    1. preparation towards the licensing of producers;

    2. its preparatory work regarding the extension of its jurisdiction over hogs that are not marketed for slaughter;

    3. work on implementation of the mandatory pricing requirements in the Decision;

    4. preparation of its payment security plans;

    5. its IT work on benchmarking as well as refining and testing its database requirements to enable technical implementation of its anticipated mandatory pricing and benchmarking services;

    6. pilot projects in marketing and settling hog sales outside of Ontario Pork;

    7. implementation of its new governance structure; and
       viii. the new Hog Industry Advisory Committee.

42. Zantingh agreed with the proposal of Ontario Pork. The OMG agreed with Ontario Pork's proposal, in the alternative to a full lifting of the stay. Mr. Minnema and Fields Farms objected to any limiting of the stay. Districts 10, 11, and 12, as well as the HCPPA objected to implementation of the governance structure (vii and viii).

43. The list of requests provided by Ontario Pork was of limited assistance to the Tribunal. It was not supported by evidence to clearly distinguish work that was already underway at Ontario Pork before the Commission Decision from work that changed course or was propelled by the Decision. Further, some items on the list appeared to bridge preparatory activity and activity that implements the Decision.

44. Implementation of the Commission decision would require amendment to Regulation 419 of the Ontario Farm Products Marketing Act, specifically the revocation of paragraph 5 (j), section 9 and the exemptions in section 3 (paragraphs 7, 8 and 9 of the Commission's decision). There was no evidence that the Commission had in fact taken steps to amend Regulation 419. While the statutory stay is in effect, no such amendments shall be made.

45. The implementation plan ordered by the Commission in paragraph 10 of its decision has already been prepared and presented, as well as a proposal on a governance model ordered in paragraph 13.

46. A word must be said about the "pilot projects" for the marketing and settling of hog sales outside of Ontario Pork. It would appear from submissions made at the Pre-Hearing Conference that a number of the participants present, including Conestoga, Maple Leaf, and Quality Meat Packers were proceeding with a parallel system of settling contracts using their own logistics systems, while still paying the marketing fee to Ontario Pork. Representatives of those businesses seemed unaware that such activity might be in violation of the statutory stay. Counsel for the Commission pointed out that authority already existed to conduct these pilot projects prior to the Commission decision, through the power to allow exemptions from the regulations.

47. If the regulations permit Ontario Pork to undertake these pilot projects, it is beyond the scope of the Pre-Hearing decision for the Tribunal to revoke that authority. However, the pilot projects do seem to be concrete steps towards the implementation of an open marketing of hogs in Ontario. To allow them to continue unimpeded while the issue of a single desk versus open marketing is the central issue under appeal, could undermine those very appeals.

48. There was no specific evidence presented at the Pre-hearing Conference as to the extent or the nature of these pilot projects. Neither was there evidence at the Pre-Hearing Conference to indicate whether Ontario Pork had made exemptions in any formal or documented way. Given the nature of the decision under appeal, Ontario Pork must clearly specify when it is exercising its authority to grant exemptions. If the pilot projects are not or cannot be authorized under the current regulations, they should stop.

49. Those participating in the pilot projects continue to pay a marketing fee to Ontario Pork. There was no evidence put forward at the Pre-Hearing Conference that this additional fee amounts to irreparable harm to any participant.

50. The Hog Industry Advisory Committee is established under Regulation 419 s. 13. Prior to the Commission decision, it had been inactive for some time. New Terms of Reference for the Hog Industry Advisory Committee have been drafted, and members appointed. The "new" Committee is intended to reflect the marketing structure outlined in the Commission decision. As such, it would be inappropriate for the newly constituted Committee to continue its work under a revised format, pending appeal. However, the stay would not prevent it proceeding under the existing regulatory structure.

51. While the Tribunal is usually of the view that consultation with members of marketing boards and industry stakeholders is beneficial, under the present circumstances, while the overall structure of the industry is being reviewed on appeal, the Tribunal is concerned that consultation will not be accurately representative and might, in fact, be misleading.

52. The Tribunal does not want to close the door to consultation, however, the value of any consultation that might take place would have to be assessed once the appeals are determined, whether or not the appeals are successful.

Other matters

53. Commission counsel expressed concern that the requirement for providing proof of service is onerous for parties not represented by counsel. The Tribunal Rules require proof of service for motion materials only. Counsel may raise this concern for consideration by the Tribunal if further motions are brought in this appeal.

54. Mr. Minnema brought a motion requesting production of the letters that initiated the Commission hearing. The Commission produced a copy of a letter, however, it had removed the signatories, claiming protection of personal information under the Freedom of Information and Protection of Privacy Act (FIPPA).

55. Commission counsel confirmed there was no provision of FIPPA that barred the Tribunal from ordering production of all the letters that initiated the Commission hearing as well as disclosing all signatories. The Tribunal also referenced s. 16 (7) of the MAFRA Act, which requires that on appeal the Commission "forthwith provide the Tribunal with all relevant by-laws, documents or other materials, of any kind whatsoever, in its or his or her possession". A copy of the Commission's hearing record has been provided to all parties. The production of all additional documents as described in section 16(7) will be ordered.

Hearing de novo or on the record

56. As outlined in the Interim Decision of the Tribunal dated March 13, 2009, on appeal the Tribunal may substitute its opinion for that of the Commission. The appeal could be a complete rehearing of the case, arguments on the evidence, or some variation in between.

57. The parties and intervenors requested that the Tribunal determine as part of the Pre-Hearing Conference what type of hearing it will hold. This would be relevant in terms of determining the amount of time that would need to be set aside to prepare for and conduct the appeal hearing. The Tribunal advised the parties that it is more appropriate for the panel hearing the appeal to determine such questions.

58. Some participants at the Pre-Hearing Conference included submissions in their written materials with respect to the nature of the hearing they considered appropriate, and there was also some response to those submissions. It was agreed that parties would be given sufficient time following the issuing of this Interim Decision to make written submissions and to respond. The time lines will be set out in the order.

Order

The Stay

59. The Tribunal confirms the stay of the October 6, 2008, decision of the Commission, and the scope of the stay is defined or limited as follows:
    1. The stay shall remain undisturbed, without modification, regarding paragraphs 1, 5, 7, 8, 9, 10, and 12 of the Commission Decision Conclusions.
    2. Paragraph 6 is merely a statement of finding and does not in itself implement any action.
    3. The plan set out in Paragraph 10 and the proposal set out in Paragraph 13 have already been completed, and therefore the issue of the stay is moot. No further steps towards implementation of either shall take place.
    4. Paragraph 11, requiring a plan for collecting charges and describing the nature and scope of services provided by Ontario Pork and requiring consultation with its membership and stakeholders, is also hereby stayed except to the extent that Ontario Pork wishes to carry out preparatory work internally.
    5. There shall be no amendments to Regulation 419 of the Farm Products Marketing Act to give effect to the Commission decision pending the determination of the appeals in this matter.
    6. The Hog Industry Advisory Committee may operate, only as structured in the current Regulation 419, subject to the caveat as to the value of consultation while the appeals are pending.
    7. The pilot projects in marketing and settling hog sales outside of Ontario Pork may continue only to the extent that they can be and are properly authorized by exemption by Ontario Pork under Regulation 419. Producers will continue to pay the appropriate marketing fee to Ontario Pork pending the appeals.

Type or Hearing

60. With respect to submissions as to whether the appeals shall be heard as a hearing de novo, or hearing based on the evidence presented at the Commission or any other type of hearing, as provided by paragraph 16 (11) of the MAFRA Act:
    1. By Friday, June 26, 2009, all parties and intervenors wishing to make submissions to this effect shall provide to the Tribunal five (5) copies of its submissions and one (1) copy to each other party and intervenor.
    2. By Thursday, July 2, 2009, all parties and intervenors wishing to make a reply or response to such submissions, shall provide to the Tribunal five (5) copies of its submissions and one (1) copy to each other party and intervenor.
    3. Parties who previously provided submissions about the type of hearing preferred shall provide their submissions anew, as ordered above.
    4. As proof of service, parties and intervenors shall confirm in writing to the Tribunal that copies of documents referred to in paragraphs i and ii have been provided.
    5. A panel of the Tribunal, appointed to hear the appeals, shall consider the written submissions as part of its process to determine the nature of the appeal hearing, and shall issue a decision as soon as practicable

Additional Documents

61. In accordance with s. 16 (7) of the MAFRA Act, the Commission is ordered, to provide the Tribunal and all parties and intervenors with all relevant by-laws, documents or other materials, of any kind whatsoever, in its possession relating to the subject matter of the appeals, that have not already been provided, by Wednesday, June 24, 2009.
62. The Tribunal further orders the Commission to provide a copy of all letters and requests, and letters supporting such requests, including the signatories to such letters, which initiated its July 2008 hearing into these matters, that have not already been provided, to all parties and intervenors by Wednesday, June 24, 2009.

Dated at Guelph, Ontario, this 19th day of June, 2009.