April 20, 2000

1.0 Introduction

On February 28, 2000, Mr. Ron Dubois filed a notice of appeal against the actions of The Saskatchewan Broiler Hatching Egg Producers Marketing Board (BHE). The appeal was related to a February 14, 2000 decision of the BHE to not renew the license of RD Poutry for the year 2000 production.

2.0 Background

On February 14, 2000, the BHE board delivered a letter to Ms. Christine Clifford (Mr. Dubois' lawyer) indicating that Mr. Dubois' license to produce broiler hatching eggs would not be renewed. The basis of the BHE's decision not to renew Mr. Dubois license was that:

1. In the view of the BHE board, Mr. Dubois had failed to produce documentation proving that he was engaged in the production and marketing within Saskatchewan of hatching eggs, thus, failing to prove that he is a "producer" within the meaning of the plan. The BHE board's interpretation of the plan includes being "actively involved in the day to day operations of the production unit registered under his name." With this interpretation, the BHE board argued that Mr. Dubois was not a producer;
2. Mr. Dubois had failed to provide information on his principle residence; and that
3. Mr. Dubois had failed to provide complete financial disclosure.

Mr. Dubois has been producing hatching eggs in Saskatchewan for eight years. Mr. Dubois produced hatching eggs without incidence until 1998 when the BHE board began questioning the legitimacy of his production unit.

Mr. Dubois contracted Security Enterprises Ltd. to manage his operations. Security Enterprises then sub-contracted an onsite manager for Dubois, which happened to be Pedigree Poultry Ltd.

The BHE board, in March of 1999, became aware that RD Poultry had not purchased any breeder pullets directly from the hatchery since at least February of 1997 and began to investigate whether RD Poultry was actually producing as per the quota issued. The board believed that the RD Poultry habit of not purchasing pullets from the hatchery meant that he was not producing. The BHE board believed this relationship to be more than just a purchasing agreement and began a more detailed investigation.

The regulations do not state that a producer has to purchase pullets from the hatchery. RD Poultry indicates that they purchased their pullets from Pedigree Poultry, not the hatchery.

The BHE's investigations led to the failure to renew RD Poultry's license on the basis that Mr. Dubois failed to prove that he was a producer of broiler hatching eggs.

3.0 Attendance

The appeal meeting convened at 10:00 a.m. with the following members of the Agri-Food Act Appeal Committee sitting on the appeal.

Mr. Jim Long, Chairperson
Mr. Murray Fulton, Vice-Chairperson
Mr. Ray Riviere, Member
Mr. Harold Greyeyes, Member

Mr. Roy White, Secretary
Mr. Brian Machin, Assistant-Secretary

Representing the Appellant:

Ms. Christine Clifford, legal counsel for Mr. Dubois

Representing BHE Board:

Mr. M. Sawatzky, legal counsel for the BHE Board
Mr. Vic Loewen, Chairperson of the BHE Board
Mr. Ralph Isaac, Member, BHE Board
Mr. Mervin Slater, Manager, BHE Board

Observers:

Mr. James Glen
Mr. Albero Santamaria

Mr. Dubois did not represent himself at the hearing. Ms. Clifford stated that Mr. Dubois believed that the issues to be debated were matters of law and that his lawyer could argue these points. The hearing was conducted on April 20, 2000 in Regina, Saskatchewan.

4.0 Salient Points

• Mr. Dubois had been a licensed producer under the Saskatchewan Broiler Hatching Egg Producers Marketing Plan for eight years. Mr. Dubois' production unit held a quota of 8,400 breeder chicks.

• On January 19, 1998, the BHE recognized Mr. Dubois as a producer "placing 7700 chicks per year for the last 4 years". The BHE's recognition of this indicates that they did in fact recognize Mr. Dubois as a producer.

• On February 14, 2000, the BHE board determined that Mr. Dubois was not a "producer" within the meaning of the regulations. The BHE indicated that Mr. Dubois was not "actively involved in the day to day operations of the production unit registered under his name", and thus, should not be considered a producer.

• A producer is defined in the BHE regulations as "any person who:

(i) is engaged in the production and marketing within Saskatchewan of hatching eggs from 200 or more broiler breeders and includes the employer of any such person;
(ii) is entitled under any lease or agreement to a share of the hatching eggs produced by a person mentioned in sub-clause (i) or the proceeds from the sale of those eggs; or
(iii) takes possession of any hatching eggs pursuant to any form of security or legal proceeding for a debt;…"

• In a letter dated December 17, 1999, the BHE board requested the following information from Mr. Dubois:

  (i) "Details of his involvement with the operation in Saskatchewan;
  (ii) If breeder chicks were not purchased, why were they not purchased?;
  (iii) Complete financial disclosure of your involvement including income tax returns for the last three years and bank records indicating your expenses and deposits to the account;
  (iv) Proof of ownership of the facility;
  (v) Fowl kill sheets;
  (vi) Production records for the last three years."

• RD Poultry (the name of Mr. Dubois' company controlling his production) is not an incorporated company. Therefore, the company's profit/loss is recorded directly on Mr. Dubois' personal income tax statement.

• In a letter dated January 19, 2000, Ms. Clifford answered the questions stated above, with the exception of complete financial disclosure, arguing that this was grossly intrusive and that all the relevant information had been supplied.

• In a letter dated December 22, 1999, the BHE requested Mr. Dubois' personal income tax returns be submitted to the board for review and requested that he provide the board with his principal residence.

• In a letter dated February 2, 2000, the BHE board requested a clarification of the relationship between Pedigree Poultry Ltd. and Mr. Dubois and continued to request the personal income tax returns and principle residence for Mr. Dubois.

• Ms. Clifford replied to the letter of February 2, 2000, indicating that the relationship between Pedigree Poultry Ltd. and Mr. Dubois had already been outlined (and again explained the relationship) and again indicated the Mr. Dubois was not willing to hand over his personal income tax returns. Ms. Clifford also noted that any correspondence to Mr. Dubois should be forwarded to her office and indicated that the requests of the BHE board were becoming unreasonable.

• The board was unable to provide meeting notes of the conversation at the BHE board meeting at which it was decided to not renew RD Poultry's license.

5.0 General Observations

In the view of the committee, the central issue is whether Mr. Dubois was, under the Plan, considered a producer and whether the BHE board acted properly in not renewing his license.

The Committee is satisfied that Mr. Dubois meets the definition of a producer as specified in the Plan. As such, it is the Committee's view that the Board unnecessarily intruded upon Mr. Dubois right to privacy when it requested personal income tax records. Furthermore, the Committee concludes that since Mr. Dubois meets the definition of a producer under the Plan, that the Board's actions were intrusive and bordered on harassment. If the Board is concerned that the definition in the Plan needs to be changed, then the Committee suggests that the Board proceed with a request for a regulation amendment to adjust the definition of a producer.

6.0 Decision

The Appeal Committee rules in favour of the appellant. The Committee hereby disallows the decision of the BHE board of February 14, 2000 to not renew the license of RD Poultry. The Committee directs the Saskatchewan Broiler Hatching Egg Producers Marketing Board to immediately reinstate the production license of RD Poultry. In the committee's view, there were no proper grounds to not renew the production license of RD Poultry.

The Appeal Committee would also recommend that professional mediation be assembled to develop a viable, long-term working solution that would include representatives of RD Poultry, Pedigree Poultry and the BHE board. The purpose of this mediation would be to find common ground between these parties and recommend a solution that will benefit the industry and its growth over the next three years. It is recommended that this committee be assembled immediately.