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Agriculture - Eggs. Sweda Farms Ltd. v. Egg Farmers of Ontario
In Sweda Farms Ltd. v. Egg Farmers of Ontario (Div Court, 2023) the Divisional Court outlines some basics of egg marketing in Ontario [paras 3-5] - and some political changes that some egg producers sought [paras 6] - here in the course of a JR of a decision of the Farm Products Marketing Act:Background
[3] Ontario egg production is regulated by a “supply management” system that integrates both federal and provincial authority. EFO is a member of the federal agency Egg Farmers of Canada and regulates the production and marketing of eggs within Ontario with powers granted by the Farm Products Marketing Act,[1] (the “FPMA”).
[4] Pursuant to the FPMA, Regulation 407: Eggs – Marketing (“Regulation 407”) provides for the control and regulation of the production and marketing of eggs in Ontario. Under the system, egg producers are free to create independent contracts with egg graders. The producers ship eggs to the grading station, which grades the eggs on their quality and pays the producer based on the grade given. Grading stations pay applicable licence fees to EFO under its regulations. Egg graders and processors have no institutionalized form of market share, quota system or assurances of supply pursuant to which they are entitled to receive an allotment of eggs.
[5] The Tribunal plays a supervisory role over EFO as defined in the FPMA and Regulations, while EFO is responsible for the day-to-day management, marketing, and regulation of the egg marketing system in Ontario.
[6] Sweda Farms owns an egg grading station in Blackstock, Ontario. In April 2021, Sweda made a request to EFO that EFO redirect the egg production of 200,000 hens to Sweda’s grading station. EFO wrote back requesting further clarification on the precise relief Sweda was seeking. In May, Sweda submitted a more detailed request. Sweda requested that EFO hold a hearing to determine whether EFO “could create regulations and policies in relation to where a producer’s regulated product is marketed.” Essentially, Sweda argued that EFO had the regulatory power to direct egg producers to specific grading stations (“direct marketing”) and wanted EFO to enforce this power with a new system of regulations and policies.
[7] EFO denied the request on June 1, 2021 and denied a further request for reconsideration on September 7, 2021. EFO’s basis was that Sweda lacked standing as either an egg producer or grading station operator and further, that the issues raised were the same as or similar to issues that remain unresolved in actions that Sweda had brought in the Ontario against two of the major egg graders in Ontario alleging, among other things, conspiracy in the production, grading, sale and/or supply of eggs in Canada.
[8] On October 4, 2021, Sweda brought an appeal to the Tribunal. Sweda asked the Tribunal to set aside EFO’s decision, and in its place order that “EFO implement the regulations as set out in FPMA, Regulations 407, that EFO purchase all producers eggs by means of a pool and direct egg producers to market eggs geographically to all Grading Stations including Sweda and other smaller graders.” In the alternative, Sweda asked that EFO be compelled to direct egg production of 200,000 hens to Sweda and any smaller graders upon request or that the Tribunal order the Ontario Farm Products Marketing Commission (the “Commission”) to investigate the issues raised.
[9] On February 28, 2022, the Tribunal held a pre-hearing conference to receive oral submissions with respect to the jurisdiction of the Tribunal on the appeal. Following that conference, the Tribunal dismissed the appeal and awarded costs in favour of EFO, for reasons delivered on April 13, 2022.
[10] On May 12, 2022, Sweda brought the present application for judicial review.
[11] Although, the Commission was represented by counsel at this hearing, it did not make oral submissions, nor did it file written material.
Jurisdiction
[12] The application is brought pursuant to the Judicial Review Procedure Act.[2] It was brought within 30 days of the release of the Reasons for Decision of the Tribunal, dated April 13, 2022. The Tribunal is a statutory body continued under section 14 of the Ministry of Agriculture, Food and Rural Affairs Act. (MAFRAA)[3] There is no contest that the applicant has standing to bring this application for judicial review. Much of the balance of the case [paras 36-55] I found to be confusing, even after several reads. I understand that there are numerous other cases involving some of the same parties.
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