April 20, 2000

1.0 Introduction

On March 23, 2000, Mr. James Glen filed a notice of appeal against the actions of The Saskatchewan Broiler Hatching Egg Producers Marketing Board (BHE). The appeal was related to a BHE decision to withhold the year 2000 production license of Pedigree Poultry.

2.0 Background

On March 23, 2000, Mr. Glen filed a notice of appeal against the BHE for not issuing Pedigree Poultry Ltd. year 2000 production license. The reasons provided by the BHE board for not issuing this license were that Pedigree Poultry:

a. Failed to properly fill out their year 2000 License Application Form; and
b. Had outstanding levies for flock #135. (Tab 50, Letter from BHE to James Glen stating they require the correct filing of the License Application Form and the levy payment for flock #135).

The BHE board and Mr. Glen debated who was required to pay the levy for flock #135. Mr. Glen argued that the flock belonged to Mr. Dubois and that Mr. Dubois was responsible for the payment.

On August 17, 1998, Sunnyland Poultry Products issued an invoice to Mr. James Glen for lot 135, 8500 Hubb Female Breeders. On May 11, 1999, Sunnyland issued a receipt for $1848.24 to RD Poultry for flock #135.

Mr. Glen argued that Pedigree Poultry purchased the chicks from Sunnyland on behalf of Mr. Dubois, custom grew them as pullets and then sold them to RD Poultry to allow for production of one day old hatching chicks. Mr. Glen then issued an invoice to Mr. Dubois once the hens were placed. The flock was placed in RD Poultry's layer facilities in early December 1999, to produce and market hatching eggs under Mr. Dubois' 1999 hatching egg license.

In April of 1999, Mr. Dubois sent the BHE board a cheque, covering the full amount of the levy for flock #135. The BHE returned that cheque, stating that RD Poultry had not placed breeder chicks and therefore was not responsible for paying the levy.

Mr. Glen's failure to fill out the License Application Form for 2000 is based on a conflict of opinions between Mr. Glen and Mr. Slater. The Growers Application 2000 License was submitted by Mr Glen at least three times, including January 7th, February 19th and February 26th, 2000. On the application form, Mr. Glen indicated that Pedigree Poultry had two breeder barns.

On the first application, Mr. Glen included that Pedigree Poultry had two barns. On the second application he indicated the size and dimensions of the barns. On the third application, he included that one barn is currently in use and the second barn will be built and used this year.

Mr. Glen admitted that the reason for including the two barns was that he felt Pedigree Poultry would be reprimanded later in the year if he did not indicate his intentions to build up front.

Mr. Slater indicated that Pedigree Poultry currently has one barn and that this should have been identified on the application form. Including the second barn was not necessary and not truthful, according to Mr. Slater.

This difference of opinions led to the BHE board not issuing Mr. Glen a production license for the year 2000.

3.0 Attendance

The appeal meeting convened at 1:00 p.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:

Mr. James Glen

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

Witnesses:

Mr. Real Latourneau

Observers:

Mr. Albero Santamaria

The hearing was conducted on April 20, 2000 in Regina, Saskatchewan.

4.0 Salient Points

· Mr. Glen's license had not been issued because the BHE board believed that he had:

a. Incorrectly filled out his Growers Application 2000 License; and
b. Not paid the levy on flock #135.

4.1 License Renewal

• · Mr. Glen completed and submitted a Growers Application 2000 License at least three times:

  a. January 7, 2000 - Mr. Glen indicated that he had two barns, measuring 42 x 430 feet.
  b. February 19, 2000 - Mr. Glen indicated that he had two barns and provided greater detail into the dimensions of each barn.
  c. February 26, 2000 - Mr. Glen indicated that he had two barns, included details about the dimensions and indicated that one barn was currently hatching broiler breeders and that the second barn would be available to house broiler breeders for the year 2000 hatching egg production.

• · The BHE board requested that Mr. Glen fill out the Growers Application 2000 License, indicating that he had one barn, which is the current state of affairs.
• · Mr. Glen, as noted above, indicated that he had one barn currently producing and one barn that will be constructed and available for use in the year 2000. He indicated that he is not comfortable putting down only the one barn because he believed that the BHE board would sight him for not stating his intentions to erect a second.
• · The BHE board's concerns about the development of the second barn are that this additional barn could allow Pedigree Poultry to increase its production capacity.
• · The BHE industry is supply managed, meaning that producers may only produce the amount allotted to them by the BHE board. Over-production can lead to fines by the BHE board, as noted in Order 10/86.

4.2 Levy Payment for Flock #135

• · Pullet production is not regulated by the BHE board. Mr. Glen purchased eggs from the hatchery and raised them as Parent Stock. At approximately 26 weeks, the parent stock was transferred to the broiler breeder facility of RD Poultry which is designed for the laying of hatching eggs.
• · The BHE board refused to recognize Flock #135 as Mr. Dubois' (RD Poultry), insisting that Pedigree Poultry is the owner and manager, thus responsible for the levy payment.
• · An attempt was made to pay the levy on flock #135 but the BHE board refused to accept this payment on the grounds that it was submitted by RD Poultry and not Pedigree Poultry.
• · On May 1, 1999, the BHE board indicated that it would collect the levy payment for flock #135 by requesting that the hatchery deduct $2,125.00 from the proceeds of flock #135. On May 6, 1999, Mr. Dubois consented to the fee deduction for flock #135 by the hatchery and the BHE board then chose neither to accept the cheque by Mr. Dubois' agent, nor to collect the levy from hatching egg proceeds at the hatchery pursuant to the board's orders.
• · Mr. Glen wrote to the BHE board on numerous occasions indicating that he is not the owner of flock #135, insisting that RD Poultry was the owner and that the BHE board should request payment from RD Poultry. The BHE board refused to recognize RD Poultry as the owner.

5.0 General Observations

In the view of the committee, the central issue is whether the BHE board acted properly in not issuing the year 2000 production license to Pedigree Poultry.

In the committee's view, the board did not have proper grounds for failing to renew Pedigree Poultry's year 2000 production license. The BHE board continued to ask Mr. Glen for additional information on his production license, information that, in the Committee's view, was already provided. In the application form of February 26, 2000, Mr. Glen clearly indicated that he had one barn in use and was building a second barn, to be operational by the fall of 2000.

With regard to the producer check-off for flock #135, the board acted inconsistently with normal business practices by not accepting the various attempts for payment. The BHE board received at least one cheque for flock #135 and also refused to receive payment from the Lilydale processing outlet in Wynyard. The Committee notes that the BHE Regulations do not state where pullets must be purchased.

Mr. Glen has not been exceptionally cooperative in the process and may have led to some delays, causing stress between his operation and the BHE board. Even so, he did, in the opinion of the Committee, complete the registration form correctly and clearly indicated the fact that one barn is currently in use and that a second barn would be operational later in 2000.

6.0 Decision

The Appeal Committee rules in favour of the appellant. The Committee disallows the BHE board's decision to not renew Pedigree Poultry's production license. The Committee hereby instructs the BHE board to immediately issue the year 2000 production license to Pedigree Poultry. The Appeal Committee also instructs the BHE board to accept payment for lot #135 from 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 Pedigree Poultry, RD 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.