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Thursday, June 24, 2010

N.B. Court quashes Minister's attempt to require that all chickens produced in province be processed in province

Nadeau Poultry Farm Limited ("Nadeau") owns and operates the only federally licensed chicken processing plant in New Brunswick.  Westco is a consortium that produces live chickens for processing and owns approximately 51% of New Brunswick's chicken production quota.  Westco holds a federal licence to market chicken interprovincially and in 2007 entered into a partnership with a Quebec company to build a new processing plant in New Brunswick (having failed to secure the purchase of the Nadeau plant).  In 2008, Westco notified Nadeau that it would no longer be supplying chickens to Nadeau's plant. 

Nadeau, facing the loss of its entire supply of chickens for processing, launched several administrative and court processes aimed at blocking the Westco plan.  An appeal to the Federal Competition Bureau failed, but an appeal of that decision is still pending before the Federal Court of Appeal.  Court challenges in New Brunswick also failed.

That was when the Minister of Agriculture and Aquaculture in New Brunswick stepped in.  On June 3, 2008, the Minister introduced Bill 81, An Act to Amend the Natural Products Act, (“Amendment”). The object of Bill 81 was to add a provision to the NPA which would authorize the Minister to designate the plants where chicken may be processed in New Brunswick.  On January 19, 2010, the Minister issued a Ministerial Order which decreed as follows:
SUBJECT: Ministerial Order to Designate Chicken Processing Plant
Pursuant to subsection 41.1(2) of the Natural Products Act, chapter N-1.2 of the Acts of New Brunswick, 1999, the following plant is designated as the federal inspected abattoir where chicken grown in New Brunswick shall be processed : 
Nadeau Poultry Farm Limited
222 Commercial Street
Saint-Fran├žois-de-Madawaska,
New Brunswick E7A 1B6

This Order is effective January 31, 2010.
The Ministerial Order designated a single plant as the federal inspected abattoir for the processing of chicken grown in New Brunswick. The legal effect of the Ministerial Order was to require producers of chicken in New Brunswick to process their entire product at that plant only. Unless it was the intention of a producer to stop processing chicken, the result of the Ministerial Order was that the only option presently available for processing of chicken grown in New Brunswick would be the single plant designated by the Minister. The practical effect of the Ministerial Order was to restrict the ability of chicken producers in New Brunswick to sell their live chickens to processors outside of the Province. In the present case the intent was to prevent Westco from exporting their chicken to Olymel’s processing plant in the Province of Quebec.

In both purpose and effect, the Ministerial Order was directed towards interprovincial trade. The legal effect to producers of chicken in the Province was a prohibition to export their chicken outside the Province of New Brunswick. The Ministerial Order, therefore, was not within the authority granted to the Minister by the Amendment.  On this basis, the Court of Queen's Bench in New Brunswick quashed the order.

Read the decision at: Westco v. New Brunswick.