Date: 20000404
Docket: T-2368-98
BETWEEN:
JOHN BOYKO and JEAN BOYKO
Applicants
AND:
ATTORNEY GENERAL OF CANADA
REPRESENTING THE MINISTER OF AGRICULTURE
Respondent
REASONS FOR ORDER
ROULEAU, J.
[1] This is an application for judicial review of a decision of the Appeals Sub-Committee of the National Income Stabilization Account (NISA) Committee dated November 5, 1998, wherein it held that the Point of Sale Guidelines had been properly applied by the NISA Administration.
[2] The facts leading to this application are as follows. In 1991 the provincial and federal governments entered into an agreement under the authority of the Farm Income Protection Act, S.C. 1991, c. 22, which established the Net Income Stabilization Account Program ("NISA Program"). The objective of the program is to provide a stabilization effect on the incomes of primary agricultural producers by establishing individual accounts for each participant which are meant to be used as a savings vehicle in good years so that funds are available to producers in adverse years. The applicants are participants in the NISA Program, which is strictly on a voluntary basis.
[3] The program operates by allowing a producer to make both matchable and non-matchable deposits to the program. A producer can deposit up to three percent (3%) of his or her Eligible Net Sales and receive matching contributions cost-shared between the federal and participating provincial governments. A producer can also make additional deposits of up to twenty percent (20%) of his or her Eligible Net Sales, although these deposits are not matched by the governments. All deposits earn a three percent (3%) interest bonus.
[4] The NISA Agreement provides for the National NISA Committee with an advisory role to Canada. The NISA Committee is made up of federal, provincial and producer representatives. The Appeals Sub-Committee of the NISA Committee ("Appeals Sub-Committee") was established in accordance with Section 6 of Schedule C of the NISA Agreement to hear appeals of participants in the NISA Program from decisions of the NISA Administration and recommend action to the Administration.
[5] Each year, participants in the NISA Program are asked to complete a form which details income and expenses in various categories. The forms are to be completed in accordance with the instructions provided in application packages and producer handbooks which are forwarded to producers. These instructions include guidelines called the "Point of Sale Guidelines" designed to assist participants in determining their net sales for the purposes of the NISA Program. The Agreement which establishes the NISA Program defines "eligible net sales" as net sales of commodities which are specified in Schedule B of the Agreement. The definition of "eligible expenses" plays no role in establishing the value of "net sales" or "eligible net sales" or the value of government contributions under section 4.2 of the NISA Agreement.
[6] Since NISA benefits are based on an eligible net sales value, it is necessary for administration purposes to define the point of sale of a product to determine the value of the product at the time of sale and the revenue received by the producer at that time. The Guidelines attempt to establish, for the purpose of determining eligible net sales, the value of an agricultural product at the point it ceases to be in control of the producer. Under the Guidelines the value of grain when it is delivered to an elevator does not include the transportation costs of getting the grain to port in Vancouver or Thunder Bay.
[7] In 1995, after the repeal of the Western Grain Transportation Act, R.S.C. 1985, c. W-8, which had for a number of years subsidized the transportation costs from elevator to port through the "CROW" rate, the value of grain at the elevator decreased as the transportation costs of the elevator to get the grain to port increased. While the policy of the NISA Program remained unchanged, namely, that the cost of grain transportation to port could not be included in producers" eligible net sales, some elevators began to identify their costs of transportation to port on grain cash tickets.
[8] In completing their 1996 annual application package for the NISA program, the applicants did not include the cost of grain transportation to port as part of their revenue but did include that amount in their 1997 application. As a result of an audit conducted by the NISA Administration, the accounts of the applicants were reassessed by reducing eligible net sales for the year 1997. The applicants were advised of the reassessment by way of letter dated August 19, 1998. On August 26, 1998, the applicants" agent, Farm Business Consultants, sent a letter to the NISA Administration requesting that the Appeals Sub-Committee reverse the decision of the NISA Administration to reduce the applicants" eligible net sales. These appeals were identical to approximately five-hundred and fifty appeals launched by the Farm Business Consultants on behalf of other grain producers who are participants in the NISA Program.
[9] The applicants requested an oral hearing before the Appeals Sub-Committee but their request was denied, as the procedure of the Appeals Sub-Committee, adopted since its inception, is not to receive oral submissions from appellants but to allow the appellants the opportunity to file written submissions. Written submissions were subsequently filed on behalf of the applicants by Farm Business Consultants. On November 5, 1998, the Appeals Sub-Committee found that the Guidelines had been correctly applied by the NISA Administration and made a recommendation that the applicants" appeals be rejected.
[10] The applicants now seek to have that decision set aside on the grounds that the Appeals Sub-Committee erred in fact and in law in its interpretation of the NISA Agreement as it relates to deducting freight and elevation expenses in determining Eligible Net Sales.
[11] After having carefully reviewed the written submissions of the parties and considered the oral arguments presented at the hearing before me, I am dismissing the application for the following reasons.
[12] The legislative authority for the establishment of the NISA program and its underlying objectives are set out in the Farm Income Protection Act. The relevant provisions read as follows:
| 4(1) The Governor in Council may, by order, authorize the Minister to enter into an agreement with one or more provinces to provide for the establishment of any of the following programs: (a) A net income stabilization account program; . . . 4(2)(a) the program should not unduly influence the decisions of producers of agricultural products with respect to production or marketing, and should encourage adjustments with respect to production or marketing so as to improve the effectiveness of the responses of producers to market opportunities; (b) the level of protection to be provided by, and the relative share of governmental contributions to be provided to, the program in relation to particular agricultural products or classes of agricultural products should be equitable and reasonably consistent with all other agreements, taking into account regional diversity; . . . 5.(1) An Agreement shall provide for the required elements of each program to be established under the agreement, including without limiting the generality of the foregoing, any elements that may be prescribed and the following required elements; (c) the manner of determining the income of producers and the manner of determining the value of the eligible agricultural products produced by them; (e) the circumstances in which the conditions under which a payment will be made to a producer or group of producers, the method of determining the amount of a payment, and the manner in which the payment will be made; 8.(1) An agreement that provides for the establishment of a net income stabilization account program shall, in addition to the required elements referred in subsection 5(1), provide for: (a) the eligible net sales, eligible production costs, gross margin and maximum eligible net sales, or the methods of determining the sales, costs and margin, that enable a producer to participate in the program; |
| 4(1) Le gouverneur en conseil peut, par décret, autoriser le ministre à conclure avec une ou plusieurs provinces un accord instituant, séparément ou conjointement, le programme et un ou plusieurs des régimes suivants: régime universel, assurance-récolte ou assurance-revenu. . . . 4(2)a) le maintien du libre choix des producteurs qui ne doit pas être indûment restreint par le régime ou programme, lequel vise à permettre à ceux-ci de mieux s"adapter aux contraintes du marché en ce qui touche la production et la commercialisation; b) la nécessité de l"équité et d"une relative uniformité, compte tenu des particularités régionales, entre les divers accords dans la protection offerte, d"une part, et dans les contributions respectives des gouvernements relativement à des produits agricoles - ou catégories de produits - donnés, d"autre part; . . . 5.(1) L"accord prévoit, outre ceux qui peuvent être ajoutés par règlement, les éléments constitutifs du régime ou programme institué, et notamment: c) le mode de détermination du revenu des producteurs et de la valeur de leurs produits agricoles admissibles; e) les cas et conditions dans lesquels les paiements à un producteur ou à un groupe de producteurs doivent se faire, ainsi que les modalités de leur versement et le mode de détermination de leur montant; 8.(1) L"accord instituant un programme fixe, outre ceux déjà mentionnés au paragraphe 5(1), les éléments suivants: a) le mode de détermination et le niveau des coûts de production et des marges brutes à partir duquel un producteur est admissible, ainsi que, dans le cas des ventes nettes, le seuil et le plafond; |
| [13] It has long been recognized that administrative bodies frequently develop a coherent set of guidelines to assist in the exercise of their discretionary statutory powers such as those set out above in the Farm Income Protection Act. Policies allow a public body to develop guidelines which bridge the gap between a general discretionary statutory power and its specific application to a particular case. There is judicial recognition that the consistent exercise of discretionary administrative power inevitably leads to the formulation of some general policy relating to the exercise of that power. The content of the policy must be within the scope of the power bestowed by the enabling legislation and it cannot be formulated or applied in bad faith or with regard to irrelevant considerations or purposes extraneous to the intent of the legislation. It is well established by the jurisprudence that provided these criteria have been met, the Courts will exercise caution and restraint in reviewing administrative actions of this nature. These principles of law were stated by the Supreme Court of Canada in Maple Lodge Farms v. Government of Canada (1982), 137 D.L.R. (3d) 558 in the following terms at p. 562: |
| In construing statutes which provide for far reaching and complicated administrative schemes, the judicial approach should be to endeavour within the scope of the legislation to give effect to its provisions so that the administrative agencies created function effectively, as the legislation intended and the courts should wherever possible, avoid a narrow, technical construction and endeavour to make effective the legislative intent as applied to the administrative scheme involved. It is, as well, a clearly established rule that the court should not interfere with the exercise of a discretion by statutory authority only because the court might have exercised the discretion in a different manner had it been charged with that responsibility. Where the statutory discretion has been exercised in good faith and, where reliance has not been placed upon considerations irrelevant or extraneous to the statutory purpose, the courts should not interfere. |
| [14] The Federal Court of Appeal adopted this reasoning in Carpenter Fishing Pool v. Canada (1998), 155 D.L.R. (4th) 572 wherein Decary, J.A. stated at p. 581 as follows: |
| To the extent that the policy is developed by the minister in the exercise of his general duties . . . and that it is not blindly applied by him in the later exercise of his discretion in granting a specific licence, the act in granting the licence, however administrative in nature and otherwise is subject to ordinary judicial review as it may be, cannot be challenged under the general rules applicable to administrative actions in so far as its policy component . . . is concerned. When examining an attack on an administrative action . . . reviewing courts should be careful not to apply to the legislative component the standard of review applicable to administrative functions. The line may be a fine one to draw but whenever an indirect attack on a quota policy is made through a direct attack on the granting of a licence, courts should isolate the former and apply to it the standards applicable to the review of legislative action as defined in Maple Lodge Farms. |
| [15] In the present case, the Guidelines in question are clearly a studied policy formulated by the parties to the NISA Agreement after public consultation and years of deliberation by NISA officials and committee members. They are of general application to all of the voluntary participants in the NISA program. There is no evidence here of bad faith or reliance having been placed upon irrelevant or extraneous considerations in the development of the Guidelines. Although the present application is couched in terms as a direct attack on the recommendation of the Appeal Sub-Committee to apply the policy, the real essence of the applicants" complaint is with the policy itself; in other words, they take exception to the fact that the term "eligible net sales" does not include grain transportation costs to port and argue that the Guidelines in some way constitute an unlawful amendment of the NISA Agreement. However, all of the evidence before this Court clearly establishes that the meaning of "eligible net sales" has never, since the inception of the program to the present, included grain transportation cost to port nor has the NISA Agreement ever been formally amended to reflect any change of that nature. In short, the Guidelines continue the same policy as has always existed within the NISA Program. |
| [16] Under these circumstances, there is nothing which would warrant the interference of this Court in its judicial review capacity. |
| [17] For these reasons the application is dismissed. |
| JUDGE |
| OTTAWA, Ontario |
| April 4, 2000 |