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Agriculture - AgriCorp Act, 1996 Cases

. 2041219 Ontario Limited v. The Business Risk Management Review Committee

In 2041219 Ontario Limited v. The Business Risk Management Review Committee (Div Ct, 2021) the Divisional Court covers some basics of the Ontario Agricorp agriculture legal regime:
The Risk Management Program

[4] The Ontario government has established various business risk programs for agricultural producers in Ontario. Agricorp, which is a Crown corporation, administers the programs.

[5] One of the programs is the Risk Management Program for Cattle Farmers (the “Program”), which provides various benefits to cattle farmers. The Program is meant to help farmers offset losses due to price falls and production cost increases.

[6] The Program was established in 2011 through Order in Council 1309/2011 titled Ontario Risk Management Program (the “OIC”). The OIC sets out eligibility criteria for the benefits under the Program. The criteria are also set out in Guidelines published by the Ontario government and in a Participant Handbook (“Handbook”) published by Agricorp. The interpretation of the eligibility criteria in the OIC, Guidelines and Handbook is at the heart of this application for judicial review. They are reviewed in detail in the analysis below.

[7] The Program provides benefits to cattle farmers where their average production costs exceed the market value of their products. Production costs and market value are based on the cattle’s weight gain and are calculated on a per pound basis.

[8] The Program is funded by the Ontario government. The funding for the Program is approximately $100 million per year, which covers the administration costs and benefits paid out by the Program. Each producer who participates in the Program is entitled to a maximum of $1.2 million per year, which may be prorated down depending on the overall demand for the Program in any given year.

[9] Producers who participate in the Program are to pay a fee, but the fee does not cover the costs of the Program. The Program is funded by the Ontario government. Producers who participate in the program choose their level of coverage, which in the relevant period could be 100%, 90% or 80%.

[10] The calculation of the amount to be paid under the Program is based on the difference between the average cost of each pound gained by the cattle and its market value. Where the cost exceeds the market value, the Program pays the percentage of coverage for that amount (for example 100% of the loss for farmers opting for 100% coverage) minus 60%.

[11] Agricorp administers the program by processing applications and by conducting occasional audits on the amounts paid out.

[12] Where there is a disagreement between a farmer and Agricorp over the amount owed under the Program, the farmer can request a review by the Committee. The Committee is composed of agricultural producers. The Committee has the power to make non-binding recommendations to Agricorp.
. 2041219 Ontario Ltd. v. Agricorp

In 2041219 Ontario Ltd. v. Agricorp (Div Ct, 2021) the Divisional Court considers a rare Ontario crop insurance case (involving 'Agricorp', the statutory corporation that provides crop insurance). The case is useful for showing mechanics of such insurance and the related law:
[7] Agricorp is a provincial government agency that delivers crop insurance and other agricultural risk management programs. One such program is the Program referred to above. This is an insurance-like program to assist beef farmers to offset losses caused by fluctuating commodity prices. Payments are made to the cattle raisers if market prices fall below specified support levels based on the industry-average cost of producing livestock and the support level chosen by the individual participant.

[8] Any payments under the Program were calculated using volumes determined by livestock weight gain. Between 2011 and 2017, the Applicant reported weight gained on its cattle that included weight gained in Ontario and outside of Ontario. The Applicant’s applications for support under the Program were approved from 2011 to 2016. In 2017, following an audit, Agricorp took the position that only cattle weight actually gained in Ontario was eligible for support under the Program and that any cattle weight gained outside of Ontario was ineligible.

[9] Following an internal process of review and an iterative process with the Applicant, Agricorp declined the Applicant’s application for support in respect of any cattle weight gain that took place outside Ontario. Agricrop subsequently conducted a retroactive three-year review of the Applicant’s prior payments. This process resulted in a claim for a claw-back of about $26,000 for the prior three years.

[10] Under the relevant Order in Council, a review of Agricorp’s decision was available to the Applicant from the Committee, which can issue a non-binding recommendation. The Applicant sought that review from the Committee and sought a recommendation from the Committee that Agricorp’s interpretation of the Program’s eligibility criteria was incorrect and not supported by the Program’s terms and conditions.

[11] Following the filing of extensive written material, the Committee, consisting of five members, held a hearing in June 2018. Both sides were represented by counsel; the Committee also had the benefit of its own counsel. Later the same month, the Committee issued its Recommendation, signed by the Committee Chair. The Committee, in the Recommendation, concluded that the weight gain of cattle while outside Ontario was not eligible for financial support under the Program. Among other things, the Recommendation relied on a definition of “Farmer” in the Order in Council which governed the Program. “Farmer” was defined as a person engaged in the production of a commodity in Ontario. Based on the Committee’s interpretation, production (weight gain) outside Ontario could not accrue to a “Farmer”, being someone engaged in beef production in Ontario, such that no production outside Ontario could qualify for support under the Program.

[12] The Applicant takes the position that this argument was never made or raised by either party in the proceedings before the Committee. (This, I should note, is not accepted by Agricorp which will argue, on the merits of the judicial review itself, that the “definition of Farmer” issue was raised during the course of the hearing.)

[13] The Applicant further takes the position that it is entitled to know who was involved in drafting the Recommendation and where the argument based on the “definition of Farmer” came from. Following release of the Recommendation, counsel for the Applicant, by written correspondence, asked a number of questions about who wrote the Recommendation, whether other Committee members besides the Chair were involved, whether lawyers or other representatives from the hearing were involved and whether there were any internal policies in place governing the Committee’s decision-making process.

[14] Without conceding it was obliged to do so, the Committee had its staff respond to the effect that the Recommendation was unanimously reached by the Committee who were all present at the hearing, and that no representatives of Agricorp or the Ministry of Agriculture participated in the Committee’s deliberations or in drafting the Recommendation. The Committee also confirmed that there were no internal policies governing its deliberative process. Legal counsel to the Committee also advised that while legal counsel was engaged and advised the Committee during its deliberations and in the drafting of its Recommendation, the Committee’s deliberative process and the seeking and giving of legal advice from and to the Committee were subject to deliberative and/or solicitor client privilege which the Committee did not waive.

[15] Counsel for the Applicant was not satisfied with these answers and seeks further, more detailed responses to his questions.

[16] Following release of the Committee’s Recommendation, Agricorp, in the person of Ms. Meneray, an Agricorp employee, issued a letter in which she recited the conclusions of the Committee from the Recommendation, reiterated Agricorp’s earlier decision that weight gain of cattle while outside Ontario was not eligible for support under the Program and confirming Agricorp’s earlier denial of the application for support in relation to any ex-Ontario weight gain. Specifically, Agricorp Decision recited the “definition of Farmer” argument in its summary of the Committee’s analysis in the Recommendation.

[17] The Applicant also claims an entitlement to know where the “definition of Farmer” argument in Agricorp’s Decision came from, who was involved in advancing it, who wrote the Agricorp Decision and who else was involved. Ms. Jones, another employee of Agricrop who had been involved in the original decision to deny support under the Program and served as Agricorp’s representative at the hearing before the Committee, filed an affidavit on behalf of the Respondent Agricorp in the judicial review. During her cross examination, questions asked about the authorship of and input into Agricorp’s Decision were taken under advisement. As noted earlier, in subsequent written answers, the the Applicants’ questions on this theme that now make up the focus of this motion, were answered under reservation of rights under Rule 34.12(2).


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Last modified: 12-11-22
By: admin