OMAFRA Farm Tax and Business Seminar 2010 - Less than a month away!

The Ontario Ministry of Agriculture, Food and Rural Affairs (OMAFRA) presents the annual Farm Tax and Business Seminar for Professional Advisors. The seminar is offered in 11 locations across the province during the months of October and November. The seminar is offered as a Webinar for those interested in attending the seminar via the web. The seminar is an excellent opportunity for accountants, lawyers, lenders and other financial professionals to update their knowledge of tax, business and legal matters related to agriculture and farm business activities. The topics vary from year to year.

This year, I will be presenting my paper on green energy contracts at the seminars: "Green Energy on the Farm: Do's and Dont's of Energy Project Contracts".  Click here for more information: Seminar Information. Click here for the registration form: Registration Form.






 
 

Landowner's reforestation efforts help drainage, but assessment of costs sticks

In 1979, Max Iland purchased an "abandoned farm property" and in 1980 he began to forest the lands under an agreement with the Province of Ontario.  He initially planted 50,000 seedlings.  Although his land is low and wet, and it was hard to grow the seedlings, he now has trees that are over 40 feet tall.  He continues to regularly plant additional seedlings and the reforestation of his land has dramatically reduced the need for drainage of his property, resulting in up to a 50% reduction in surface runoff.

Accordingly, Iland felt that he should not be assessed for a share of the costs of a local drain petitioned by the MTO - the Headrick Drain.  The drainage report was initiated by a petition submitted by the Ministry of Transportation (MTO) under Section 4 of the Drainage Act to provide drainage for a portion of the new Highway 17 in the Geographic Township of MacDonald, now part of the Municipal Corporation of Macdonald Meredith & Aberdeen Additional. The municipality appointed the Engineer in August 2007. The Engineer conducted site meetings on October, 30, 2007 and May 15, 2008, determined the "area requiring drainage" and subsequently prepared a report dated October 31, 2008 (the Report). The Report provided for deepening of the existing drain channel, brushing, culvert adjustments and erosion protection. The watershed comprises 360 hectares some of which is under agricultural production of hay, cereal grains, produce and berries.

Mr. Iland is the owner of two properties at the easterly upstream limit of the Headrick Drain watershed.  The Report assessed the two properties Outlet for 2.0 hectares and 23.0 hectares, corresponding to $170 and $990 respectively.

On appeal, the Agriculture, Food and Rural Affairs Tribunal accepted Mr. Iland's argument that reforestation of his land does in fact result in up to a 50% reduction of surface water runoff, and commended him for his reforestation efforts. However, the Tribunal did not accept Mr. Iland's argument that the drain is of no benefit to his lands. By his own admission, he agreed that the runoff due to reforestation would result in a reduction of surface water of about 50% as compared to grassed or agricultural lands. The Engineer testified that he had already applied a 50% reduction in the assessment of Mr. Iland's lands to account for reduced runoff caused by the tree cover. Accordingly, the Tribunal did not order any changes to Mr. Iland's assessments.

Read the decision at: Headrick Drain.

Canadian pipeline companies tell NEB to limit funding for intervenors

The Canadian Energy Pipeline Association (CEPA) has submitted comments to the National Energy Board (NEB) related to plans for the funding of participation in NEB processes by intervenors such as directly affected landowners.  In a letter addressed to the Secretary of the NEB, CEPA says that it believes it is "uniquely placed to offer our observations based on past experience."  In sharp contrast to the position taken by CEPA-member companies in the past, CEPA now suggests that funding for costs is an "appropriate and fair way" for intervenors to bring their views forward.  However, CEPA also says that:

Participants should be held accountable for their contribution to decision-making processes. Upon receipt of a cost claim (or through what ever accounting mechanism is adopted), NEB should conduct a post-hearing evaluation of the relevance of a participant’s contribution to the hearing, and costs should be awarded based on that evaluation. Cost awards should not necessarily cover 100% of costs incurred.

CEPA advocates close control of eligibility for costs and holding participants accountable for their "performance".

Read the CEPA letter at: Sept. 28, 2010.

Canadian Association of Farm Advisors - www.cafanet.com

CAFA is the nationally recognized organization for professional farm advisors. CAFA advisors maintain high standards while continually increasing farm advisory skills and knowledge intended to provide measurable value to their farm clients.

Visit CAFA's website to locate farm advisors including accountants, financial planners and lawyers at: http://www.cafanet.com/Home.aspx

Watch the CAFA video on YouTube:

Court determines cottagers have right-of-way over farm lane

In 1913, Charles C.C. Huycke owned a farm in the Township of Percy, in the County of Northumberland on the east side of the Trent River, across from Huycke’s Island.  On March 31, 1913, he registered Plan 104 described as a “plan of lots”, which we would today recognize as a plan of subdivision.  It is described on its face as: “Plan of Sunnybrae-on-Trent, a Summer Resort De Luxe as laid out on Lot No. 20, Con. 13, in the Tp. of Percy, 1913.” Plan 104 was executed by the Reeve and Township Clerk: “We certify that the above plan or map was prepared according to the direction of the municipality of the Township of Percy and in accordance with the provisions of the “Registry Act.””

Plan 104 created 40 lots and some access corridors and rights-of-way.  To the east of the lots is a right-of-way described on Plan 104:  “Farm Lane, a right-of-way, 30 feet in width (for all ordinary vehicles) to give access to Lots numbered 1 to 40 (inclusive) and to Lots A, B and C to the public high-way between Cons.12 & 13.” The right-of way terminated to the north at the south end of Lot 1, which was substantially larger than the other lots and was bounded to the north by the unopened road allowance between Concessions 13 and 14. The configuration shows that the owner of Lot 1 was intended to control access to that road should the allowance be opened.

A recent action before the Ontario Superior Court of Justice addressed the respective rights and interests of the parties in a laneway or roadway known as “Sunnybrae Lane” that is located to the east of the cottage lots and is the means by which the cottagers access their properties.  The plaintiff in the action, Sunnybrae Springbrook Farms Inc., has legal title to most of the laneway, and wanted the municipality to assume it as a municipal road so that the plaintiff could avoid the costs and liabilities of ownership. The municipality refused to assume the road until it was upgraded to municipal standards at great expense.  It took the position in its Statement of Defence that “Trent Hills has no legal interest in the right-of-way and bears no responsibility for upgrading, repairing or altering the road and lacks the jurisdiction to do so. Trent Hills states that it is the responsibility of the owners of the dominant tenements and /or the land owners to ensure that the private road is maintained in accordance with their wishes and desires.” The plaintiff farm did not use the road and did not want to pay for its upgrading. The cottagers, who appear to be the road’s main if not only users, were not prepared to contribute to its upgrading, although they asserted that they do some work on it from time to time. A site visit on August 3, 2010 by the court with counsel confirmed this to be true.

In the end, in ruling on a motion for summary judgment, the Court found that the cottagers had acquired a right-of-way by prescription (related to the passage of time) over Sunnybrae Lane.  The Court then referred the issues regarding the repair of Sunnybrae Lane (including who is responsible for the repairs and to what extent) to the trial judge, along with any other issues that survived the summary judgment motion.

Read the decision at: Sunnybrae Springbrook Farms Inc.

NEB discusses plans for intervenor funding - still not available

In a letter to the World Wildlife Federation (WWF), the National Energy Board (NEB) confirms that it has had approval from Parliament since July to initiate a funding program for intervenors including landowners in its oral hearings processes, but that the program is still not in place.  WWF asked whether funding would be available for participation in the NEB's upcoming review of oil and gas drilling in the Arctic.  The NEB confirmed that funding through an intervenor funding program would not be available for the review.  Funding may become available for:

• Certificate of public convenience and necessity for a pipeline (section 52); Exempting orders respecting pipelines (section 58);

• Certificate of public convenience and necessity for an international or designated interprovincial powerline (subsection 58.16);

• Abandonment of an international or designated interprovincial powerline (subsection 58.34); and

• Abandonment of a pipeline (section 74). 

At present, landowners have no ability to recover costs for participating in those NEB processes.  The NEB has recently confirmed that even if funding does become available in the future, it will not apply to processes that are already underway.  However, since the funding program would be solely a procedural change to the process, there seems to be no legal reason why the NEB could not choose to provide funding to participants in ongoing processes.  For that reason, the NEB appears to have made a policy decision that it will not subject companies to the intervenor funding program unless the program was in place at the time an application was filed.  One can only guess at the reason for the decision.

NEB confirms that landowners required company permission to cross pipelines even for low-risk activities

In a letter addressed to Pipeline Crossings Working Group Members, the National Energy Board (NEB) has confirmed that Section 112(2) of the National Energy Board Act requires that landowners obtain company permission to cross pipelines with vehicles or mobile equipment for ANY purpose, even if the proposed activity is "low-risk".  The NEB is now proposing to issue an order under Section 112(5)(c) setting out exemptions to this requirement for "certain low-risk conditions where depth of cover, ground conditions, and pressure exerted by the vehicle or mobile equipment enable the safe crossing of pipelines." 

Read the NEB's letter at: LMCI Action 1.2 Letter to Pipeline Crossing Group.

Court dismisses tenant farmer's $1.2 million claim over 108 ac. property

Timothy Ehler began renting a 108-acre farm property in Waterdown in 1992 from Salem Christian Mental Health Association Inc.  At the end of August of this year, the Ontario Superior Court of Justice dismissed Elher's claim for:

(a) a declaratory order that he “has the right to remain on the property (a 108 acre farm located at 562 Dundas Street East in Waterdown (the “Salem property”)) until he turns 65 years of age.”

(b) a complementary injunction “prohibiting the defendant from taking any steps to regain possession of the property until the plaintiff turns 65 years of age”; and

(c) in the alternative, damages in the amount of $1,200,000.00.

Elher's position was that in 1992 the defendant’s representative, Reverend Dreise, assured Elher that he would be allowed to remain in possession of the subject property until he turned 65 years of age.  Over the next seven years, the parties entered into two other leases, each for a period of two years and each with two two year renewal clauses.  The last lease was signed in January 1999.  The parties also entered into two additional work agreements, the last of which was also signed in January 1999.  Notably, the last two leases included a provision whereby a sale of the property would trigger early termination of the lease.

In 2004, the Defendant advised Elher that it would need the property within a year and provided notice of termination as of December 31, 2005.  Up to the time of trial, Elher had possession of the subject farm for about 18 years and, since about 1996 or 1997, the house had been a most comfortable, perhaps even elegant, residence for which he paid minimal rental of $700 per month.  Elher volunteered the opinion that the parking rights for his trucking business alone on the Salem property had a market value of about $1,000 per month and the rental value of the property since 1996 is at least $3,000 per month, although admittedly the plaintiff himself created much of the value in the house.  The highest value placed by the Elher's experts on the costs of improving the property incurred by Elher, after having received reimbursements of $400 a month pursuant to the work agreements, was $218,651.80.

The Court found that there was no agreement that Elher could remain in possession until the age of 65:

There is no credible evidence of any oral agreement allowing the plaintiff to remain in possession of the property until he turned 65 years of age.  Apart from the lack of evidence, such an agreement would have been, from the point of view of the defendant, the height of irrationality.  The defendant intended ultimately to develop the land, although there was some uncertainty about the date for beginning the development.  There was no reason for Reverend Dreise to misrepresent that the zoning could not be changed until 2023, and I find as a fact that he did not do so. 

The Court also found that the Defendant had not been unjustly enriched by Elher's work on the property (which was compensated through various work agreements).
Read the decision at: Ehler v. Salem Christian Mental Health.

Wind Farm may seek $450,000 costs from landowner over ex parte injunction

On August 25, the Court of Queen's Bench in Saskatoon granted an interim injunction stopping further construction on the Red Lily Wind Farm.  David McKinnon, a landowner within the Red Lily project area, applied for the injunction on an ex parte basis (i.e. without the presence of the other parties, including the wind farm owner and the local municipalities).  A week later, on September 1, the Court overturned the injunction after hearing from all parties. 

In order to obtain the injunction, McKinnon had to undertake to pay damages if the injunction was found to be unnecessary and damages were caused.  Red Lily Wind Farm claims that the cost of the construction delay was $74,000 per day for 6 days, totalling nearly $450,000.  The company says it is considering seeking to recover the damages from McKinnon.

Read the story at: world-spectator.com.

Agricultural Review Tribunal clears Saskatchewan farmer of CFIA cattle tagging infraction

In May, 2009, Ken Habermehl was moving cattle from his farm to the Elbow Community Pasture about 67 kilometres away.  Three trucks left the farm.  On arrival, it was discovered that seven cattle were missing the identification tags required by CFIA and federal regulations.  A CFIA inspector was on hand.  Habermehl immediately left the pasture and drove about 2 hours to obtain new tags.  The cattle were re-tagged as soon as was humanly possible in the circumstances.  No harm, no foul.  However, under the current regulations, the missing tags were a problem for CFIA and Habermehl was cited for a violation of the Health of Animal Regulations (moving cattle without a tag) and a $500 fine.

Habermehl decided to fight the charge and, in a decision delivered earlier this month, he was exonerated by the Canadian Agricultural Review Tribunal.  In his decision, Dr. Don Buckingham made the following findings of fact central to the validity of the charge:

The evidence in this case is that the system that the Regulations rely upon, or perhaps more accurately the equipment and technology to support that system, does not establish a permanent and infallible system to track the movements of all bison, cattle and sheep in Canada. The Tribunal accepts the evidence of Habermehl that he tagged all of his cattle in 2006 with RFID (CCIA approved) identification tags and that again on the weekend of May 22-24, 2009 he did the same, even though some cattle tagged in 2006 had to be retagged because they had lost their 2006 tag. If there was human error in the application of the RFID tags during the weekend of May 22-24, 2009, there was no evidence of it presented at the hearing and it is not unimportant to note that Habermehl was a trained professional practitioner of veterinary medicine as well as being an experienced cattleman. On transport day, Habermehl again verified that all cows and calves were ready to leave his farm on May 25-26, 2009 for community pastures. The Agency and its officials were never at the Habermehl farm and there is no evidence which contradicts the testimony of Habermehl and his son on this point.

Given these facts, Dr. Buckingham could not find that the violation (moving cattle without the proper tag) had been proven on a balance of probabilities:

What is lacking from an evidentiary perspective by the Agency in this case is proof that the seven cattle did not have RFID tags when they left the Habermehl farm. Over 200 cattle had been prepared, verified and shipped from the farm between May 22 and May 26. They had all been tagged with RFID tags and then shipped in several trailers to several different pastures. Tags and buttons were found in the chute and in the trailers, but to which cattle did they belong? Agency officials failed to look for any evidence of lost tags in the trailers, or of ripped ears (or lack thereof) in the retagged cattle that would have provided the Tribunal with perhaps enough evidence to determine whether the cattle lost their tags on the Habermehl farm or on their way to, or in the holding pens of, the Elbow Community Pasture.

Given the lack of sufficient evidence on the matter, it would be "mere conjecture ... speculation, hunches, impressions or hearsay" to conclude that, on the balance of probabilities, any of the seven cows were without tags on the morning of May 26, before they were loaded into transport trailers. These tags are, after all, supposed to be permanent identification tags. The fact that any or all of these permanent tags would be lost within less than 48 hours is not proved from the evidence presented to the Tribunal.

In his decision, Dr. Buckingham also noted the problems with the imperfect nature of the tagging technology, which puts farmers in a difficult position given the flexibility of the tagging regulations.  There is no defence of due diligence (i.e. that you did everything reasonably possible to avoid the violation) available to farmers and very few instances in which a lost tag will not result in an automatic violation and fine.  As Dr. Buckingham notes, this is a "not insusbtantial problem" of RFID identification tags:

Evidence from Habermehl and Rutledge indicated that there is a problem with the current tagging system of RFID (CCIA approved) identification tags. Whether the Tribunal accepts the opinion evidence of witness Rutledge, or the actual case of the seven cows in this case, a not insubstantial problem of RFID (CCIA approved) identification tag failure exposes players in the beef, bison and sheep industry to liability for violations of Part XV of the Health of Animals Regulations.

At the end of the day, Habermehl was exonerated and the $500 fine cancelled.  However, this case highlights the extreme difficulty the tagging regulations create for farmers.  Habermehl still had to prepare for and participate in a one-day hearing in Saskatoon over a $500 fine.  CFIA also participated in the hearing represented by counsel - over a $500 fine.  The system is set up in a way that almost necessitates that farmers just eat the fine.  Almost no defences are available if a tag is found to be missing, and there is even a discount on the fine offered if it is paid immediately.  This might be acceptable if the tags themselves were foolproof and sure to stay attached to the animals indefinitely.  But that isn't the case.  Something needs to change.  Either the tags need to be perfected, or the regulations need to be made fairer to farmers by being made more flexible.

Read the full decision at: Habermehl v. CFIA.

Enbridge estimates 6,100 barrels of crude oil spilled near Chicago, Illinois

Enbridge Energy Partners, L.P., says it has completed the "drain up" of remaining oil in the pipeline segment on Line 6A in the United States that leaked crude oil earlier in the week.  Enbridge estimates that 6,100 barrels of oil escaped in the leak that has required the line to be shut down. 

The U.S. House Committee on Transportation and Infrastructure scheduled a hearing for today in Washington to look into the other recent Enbridge spill that sent an estimated 1 million gallons into the Kalamazoo River area.

Alberta Utilities Commission turns down landowner request to review MATL consultation process

The Alberta Utilities Commission (AUC) has denied a request for review by affected landowners of its approval for the construction and operation of an international power line from Alberta to the United States.  The power line application was made by Montana Alberta Tie Ltd. (MATL), and on January 31, 2008 the AUC conditionally approved the Power Line. 

In April of 2010, a group of landowners acting as "My Landman Group Inc." asked the AUC to review its decision because they alleged that MATL had not complied with the conditions of the original approval related to landowner consultation and negotiation.  Landowners asked the AUC to enforce its conditions of approval and, if the AUC declined, stated that they would ask for similar relief from the Surface Rights Board.  The landowners submitted that once MATL obtained its licence, it stopped engaging in negotiations and mitigation and cancelled meetings with landowners until survey permission was sought and a final offer was delivered, which, for certain landowners, was over two years later.

The landowners submitted that they have been attempting to discuss and negotiate outstanding matters with MATL, without any success. They believe that MATL does not intend to meet to negotiate, including making any changes to their proposed right-of-way agreements, with first and final offers having been the same, with no unique conditions between the unique needs of individual landowners. They question how these practices can reasonably be characterized as negotiation and mitigation, and believe that the concept of negotiation implies willingness by both parties to compromise.  The landowners effectively believe that MATL is not negotiating in good faith or engaging in mitigation.

The AUC rejected the landowners' request for review, first on the basis that the request was out of time and second on the basis that there were no exceptional circumstances warranting a late review.  The Commission found that:

... there is nothing before the Commission in this proceeding that demonstrates that the process has not been followed. The Commission finds that Landowner submissions simply indicate that the Landowners are not satisfied with the results of the process and that they have not reached an agreement with MATL. In this latter regard, the Commission notes that Decision 2008-006 specifically contemplated that the Surface Rights Board has the jurisdiction to issue right of entry orders and to address matters involving compensation, such as impacts from final pole locations, where private negotiations between landowners and MATL remain unsuccessful.

Read the decision at: Re My Landman Group Inc.

National Energy Board confirms its proposed intervenor funding program still not available

In response to a request by the Peace Environmental and Safety Trustees Society (PESTS) regarding Spectra's proposed Dawson project, the National Energy Board (NEB) has confirmed that its proposed intervenor funding program is still not in place and is not available for participation in current processes.  Because Spectra's application was filed before the program has been initiated (which the NEB says will take place in fall 2010), Spectra will not be required to deal with participants in its application that have the benefit of whatever funding is eventually made available.

Read the NEB's response to PESTS at: GH-3-2010 Letter re participant funding.

Waterloo County dairy farm pleads guilty to spreading non-agricultural liquid waste on frozen ground

J.P. FARMS INC. FINED $6,500 FOR SPREADING AGRICULTURAL MATERIAL CONTRARY TO APPROVAL

WATERLOO – On August 23, 2010, J.P. Farms Inc. pleaded guilty to one violation under the Nutrient Management Act for spreading source material on frozen ground. The company also pled guilty to one violation under the Environmental Protection Act for spreading source material contrary to a condition of its Certificate of Approval.

The Court heard that the company operates a dairy farm in Waterloo. The company also collects waste, mostly liquid, from various clients throughout southern Ontario. At the time of these incidents the company held a number of Certificates of Approval. The approvals are site specific and permit the spreading on land of non-agricultural source material, subject to compliance with terms and conditions.

On February 23, 2009, responding to a complaint, ministry staff conducted an inspection. It was determined that the company had spread non-agricultural source material on frozen ground, which at the time, was not an approved site. On November 16, 2009, an organic soil conditioning site approval was issued to the company that permitted the application of non-agricultural source material on land. The approval included a number of conditions with respect to separation distances. On December 1, 2009, ministry staff conducted an inspection at this site as well and determined that non-agricultural source material had been spread less than 100 meters to an off-site residence, contrary to its approval.

The company was charged following an investigation by the ministry’s Investigations and Enforcement Branch.

The company was fined $6,500 plus a victim fine surcharge of 25%. The company was given one year to pay the fine.

A provisional Certificate of Approval issued to J.P. Farms Inc. on January 11, 2010 can be viewed at: PROVISIONAL CERTIFICATE OF APPROVAL WASTE DISPOSAL SITE.

Another Enbridge Oil Leak - Company given until Monday to stop flow of oil

Here's what Enbridge is saying on its website about its latest oil leak, this time in suburban Chicago:

Enbridge has confirmed that a leak occurred Sept. 9 from its 6A pipeline in Romeoville, Illinois. Line 6A was shut down within minutes of Enbridge being notified and the section of the pipeline where the leak occurred has been isolated.

No injuries have been reported. Oil was released onto a roadway and then into a retention pond. Enbridge personnel are on site and booms have been deployed as a precautionary measure.

We express our apologies to the businesses in Romeoville and surrounding areas for the disruption, and extend our appreciation to emergency responders and regulatory agencies for their professional, diligent and supportive actions.

The U.S. Environmental Protection Agency has given Enbridge until Monday to plug the leak.  Enbridge says the leak has been contained, but oil continues to drain out of the pipe.

B.C. Court decision in Terasen v. Utzig (No. 2) released re landowner damage to pipeline

This litigation concerns whether a pipeline owned and operated by the plaintiff Terasen Gas Inc. (“Terasen”) that runs through a portion of Burns Bog in Delta, B.C. was damaged or put at risk by landfill operations on lands owned by the defendant Utzig Holdings (B.C.) Ltd. (“Utzig”). The landfill operations were conducted, with Utzig’s permission, by the other defendants Alpha Manufacturing Inc., Burns Developments Ltd. and Burns Developments (1993) Ltd. (“Alpha” and “Burns”).

In a judgment delivered on January 25, 2010, Terasen Gas Inc. v. Utzig Holdings (B.C.) Ltd., 2010 BCSC 90 (CanLII) [Terasen v. Utzig #1], the British Columbia Supreme Court held that Utzig (“the defendant”) had breached covenants in statutory right of way agreements in favour of Terasen and, in the alternative, that the defendant had committed the tort of nuisance in the period prior to October 1993. However, certain defences (consent, acquiescence, laches, estoppel and waiver) had been pleaded but were not addressed in submissions. After the delivery of judgment and further submissions from counsel, the defendant made submissions on those defences at a continuation of the trial, and the plaintiff made submissions in response. The defendant also wished to make submissions on causation, remoteness of damages and mitigation but the Court concluded that submissions on those matters should be heard at the damages phase of the trial (the issue of liability, whether someone is liable to pay damages, is often separated from the determination of the amount or quantum of damages).  Read my post on the earlier decision at: Terasen v. Utzig #1.

In the latest chapter of the case, the defendant landowner elected to make submissions only on estoppel and waiver, and abandoned the defences of consent, acquiescence and laches.  The questions for determination, relating to waiver and estoppel respectively, were as follows:

(1) Did Terasen, with full knowledge of its rights under the statutory right of way agreements, consciously and unequivocally abandon those rights?
(2) In the alternative, did Terasen do something beyond mere delay to encourage Utzig to believe that Terasen did not intend to rely on its strict rights, and did Utzig act to its prejudice in reliance on that belief, such that it would be unconscionable to grant relief to Terasen?

Based on the facts, the Court rejected both lines of defence and set down a case management conference to determine the next steps in the proceedings.

Read the decision at: Terasen Gas Inc. v. Utzig Holdings (B.C.) Ltd. (No. 2).

Kinder Morgan Canada continues to oppose Enbridge Northern Gateway application as deficient

Kinder Morgan Canada (KMC) has written to the Joint Review Panel (NEB) hearing the Enbridge Northern Gateway Pipeline application to propose that a preliminary issue be decided before the review process continues.  The preliminary issue is as follows:

Can the Panel consider the Application and carry out its mandate and responsibilities for conducting the environmental assessment of the Project under the Panel Agreement if there is no demonstration of market support for the Project and it does not comply with the National Energy Board's filing requirement of demonstrating economic feasibility and need?

KMC suggests that there are at least three grounds for deferring consideration of the application:

1. Failure to comply with the NEB Filing Manual Requirements for Section 52 Applications;
2. Adverse impacts on pipeline competition;
3. Inability of the Panel to discharge its obligations under the Panel Agreement

KMC says that the record provided to the Joint Panel by Enbridge is deficient:

The joint review panel process is the most intensive type of environmental assessment in Canada.  For the Panel to be afforded the best evidentiary record, all parties must be provided with sufficient information to test whether the proposed facilities are needed and necessary and in the public interest.  The absence of this contractual information means there is a real and unnecessary risk that the joint review process would become inefficient and wasting the significant resources of not only the Panel, but also of all of the participants in this proceeding.

Read the KMC letter at: KMC letter dated September 8, 2010.

Saskatchewan tenant farmer claims for improvements to leased property

Arliegh Enge leased his neighbours' property near Margo, Saskatchewan from 2005 to 2008.  In early November, 2008, the landowners named Hendrickson tendered the land for sale.  There was said to be a right of first refusal for Enge, but his offer of $167,225.00 was not accepted.  The land was eventually purchased for $201,000.00.  Just prior to making his offer, Enge filed an interest registration against the property, claiming an interest as lessee to the land pursuant to a verbal lease agreement.  The interest was in respect of unpaid expenses.

An action in the Provincial Court of Saskatchewan arose as a result of work done by Mr. Enge in the fall of 2007 and the fall of 2008.  Mr. Enge claimed that the defendants, through Floyd Hendrickson, agreed to compensate him for the cost of this work, which he said improved the value of the land.  The defendants denied any such agreement, other than for post-harvest spraying in 2008.  The work performed on the land, in the fall of 2007, was: (1) ditching and (2) the burying of stones and the cleaning of a fence line. The work done in the fall of 2008 was: (1) post-harvest spraying; (2) heavy harrowing; (3) cultivating and (4) ditching. The defendants admitted that Floyd Hendrickson agreed to pay the plaintiff for the post-harvest spraying done in 2008, and as a result agreed to owing the plaintiff $6,285.00 for that spraying.  That was, however, where any agreement between the parties ended.

When asked whether he had any discussions with Floyd Hendrickson about this work, Mr. Enge said that he spoke to Mr. Hendrickson off and on, and that Mr. Hendrickson didn’t object to the work being done, but Mr. Hendrickson didn’t want to pay for the work as he - only one of three owners of the land - was caught between a rock and a hard place. Mr. Enge said that Mr. Hendrickson told him to put a caveat against the land, and when it was sold, he would be looked after, in effect suggesting he would be compensated for the work at that point.

Floyd Hendrickson denied that there was any discussion of the plaintiff having a right of first refusal when the oral rental agreement was made in 2005. He said, in the fall of 2007, he noticed that Mr. Enge was taking out some bush on the fence line on the edge of this land. He said he was upset and asked Mr. Enge what he was doing, and made it clear that he had not told Mr. Enge to do this. Mr. Hendrickson claimed he said to Mr. Enge he should “leave it alone”.

In the Court's view, the evidence of Mr. Hendrickson was as believable as that of Mr. Enge. That meant it was as likely as not, as Mr. Hendrickson said, that: (1) he told Mr. Enge, in the fall of 2007 that he had not approved the cleaning of the fence line and burying of stones that Mr. Enge was engaged in on the land, (2) he told Mr. Enge in October of 2008 that the ditching Mr. Enge was about to do was “up to him” and there was no indication from Mr. Enge that he wanted compensation for any of the work, other than the spraying and (3) he at no other time agreed to compensate Mr. Enge for the ditching, heavy harrowing, cultivating or burying of stones and cleaning of the fence line.

In the end, the Court decided that there was not evidence on a balance of probabilities of an expressed or implied contract obligating the defendants to pay Enge for the work he did, other than for the spraying.  Enge was, therefore, awarded $6,285 for the 2008 post-harvest spraying plus $100 in costs.

Read the decision at: A. and M. Enge Farms Ltd. v. Hendrickson.

Giant Hogweed added to list of noxious weeds under Ontario's Weed Control Act

Environmental Bill of Rights Registry: Addition of Giant Hogweed (Heracleum mantegazzianum) to the list of noxious weeds under the Weed Control Act

Over the past two seasons, OMAFRA staff have seen an increase in reporting of giant hogweed in different areas across Ontario. Giant Hogweed has the potential to become invasive and overtake some habitats such as creek and ditch banks. The objective of the Weed Control Act is to minimize the impact of noxious weeds on agricultural land.

Until now, municipalities that were concerned about this weed negatively affecting agricultural land used the provisions in the Weed Control Act to enable them to enact a bylaw to designate Giant Hogweed a local weed within the municipality.

The addition of giant hogweed to the list of noxious weeds will eliminate the need for individual municipalities to go through the processes required to enact their own local weed bylaw under the Weed Control Act where it is negatively affecting agricultural lands.

However, a municipality might wish to still pass a bylaw to address the presence of Giant Hogweed in areas other than agricultural or horticultural land. Municipalities can enact bylaws under the Municipal Act to control plants in areas where there is a potential for negative impact to human safety.

Any person (e.g. landowners, municipalities, provincially owned land, conservation authorities, etc.) in possession of land where noxious weeds are present and negatively affecting agricultural lands, are responsible for controlling them and the cost associated with doing so. Any person wanting to use a pesticide to manage Giant Hogweed on their property can do so through the exception under the Cosmetic Pesticides Ban Act that allows the use of specific reduced risk pesticides to control plants that are poisonous to the touch.

Other Information:

The University of Guelph and OMAFRA are partners in a research project evaluating best management practices so as to provide guidance to municipalities.  OMAFRA is also engaged in various outreach and education activities to enhance the control of Giant Hogweed in Ontario.

For additional information on the Giant Hogweed, please consult Ontario Weeds: Ontario Weeds.

Other Public Consultation Opportunities:

The Ministry of Agriculture, Food and Rural Affairs is committed to open consultation on decisions that may have significant impact on the environment. OMAFRA and partner ministries will be developing a broader strategy for the management of giant hogweed. Public consultation will be part of the broader strategy for the management of giant hogweed.

Manitoba farmer wins Leo Birdsfoot Trefoil lawsuit

Manitoba farmer Engelbert Fischer was awarded a judgment of $21,006.79 plus pre-judgment interest against Dyck Forage & Grasses Ltd. in a claim before the Court of Queen's Bench of Manitoba.  Fischer had sold his 2002 and 2003 crops to the Defendant company under a contract that required the seed to satisfy a germination count of 75.  The Defendant's representative told Fischer that the germination count was in the 90's and agreed to pay $1.50 per pound for the seed.  Then the Defendant turned around and paid only $1.25, saying the germination count was insufficient.  The real dispute seemed to arise in 2004 when prices for the seed escalated to $2.00 per pound, a price the Defendant company was not willing to pay. 

In ruling in favour of Fischer, the Court found that:

(i) there was no basis for the defendant’s unilaterally reducing the price of the seed to $1.25 per pound, let alone $1.30 or $1.40 as indicated in the written agreement;

(ii) there was no discussion at the inception of the transaction of analysis by anyone other than the defendant’s employee;

(iii) there was no discussion of the seed having to satisfy a purchaser; and

(iv) there was no discussion that the plaintiff would have to wait for payment until all the seed was sold or that he would have to sell the 2004 crop as part of the transaction.

Read the decision at: Fischer v. Dyck Forage and Grasses Ltd.

Appeal Tribunal denies Dougal Lea Ltd.'s request for review of DFO decision

The Ontario Agriculture, Food and Rural Affairs Appeal Tribunal has rejected a Smithville farmer's request for review of an earlier dismissal of his appeal of a DFO quota transfer assessment.  The Tribunal had found earlier that the circumstances of Paul MacDougall's case (in particular, the death of his wife, Maryanne, from cancer and his need to care for her) did not warrant relief from the 15% assessment levied on the proceeds of the sale of his dairy quota. 

On review, the Tribunal ruled against several legal arguments made by MacDougall, and made the following comment about the applicability of another case with similar facts:

Dougal Lea argued that the evidence was "almost identical" to the evidence from the Haleyview decision and there is no basis for differentiation between the decision outcomes and therefore Dougal Lea should receive an exemption as was granted in Haleyview.

However, in Haleyview, Paul Haley's incapacity due to illness and injury resulted in the decision to leave the dairy industry where Paul Haley had been the primary operator.

In this case, the McDougalls (Paul and Maryanne) were joint operators and there was not a primary operator. Maryanne became incapable of dairy farming due to illness and Paul ceased farming in order to care for Maryanne. I find that to be a significant distinguishing factor.

As the Tribunal explained in Dougal Lea, it is required to consider each situation and develop a set of expectations and criteria to explain why an exemption should apply in one case and not another. This explanation provides farmers insight about successful exemption applications.

It is clear to me that the Tribunal carefully considered the evidence presented in Dougal Lea against the facts from all previous instances where exemptions have been granted. In that analysis the Tribunal found there were several facts that made the Dougal Lea case different from any of the previous cases.

Read the decision at: Dougal Lea Ltd. vs. Dairy Farmers of Ontario (DFO).

Review Tribunal decision highlights inflexibility in CFIA tag requirements

In a January, 2010 decision just posted on the internet, Dr. Donald Buckingham of the Canadian Agricultural Review Tribunal has once again reiterated that due diligence on the part of farmers is not enough to save them from paying for violations of cattle tagging regulations.  In this case, Doug Morningstar was found to have violated subsection 177(1) of the Health of Animals Act because two of the cattle he transported from his farm to an abattoir in 2008 did not have an approved identification tag. 

As Dr. Buckingham notes, keeping tags on the cattle at all times is no easy task:

Practical difficulties arise in attempting to have 100% of Canadian cattle tagged with approved tags. Some animals, requiring identification pursuant to Part XV of the Health of Animals Regulations, may never be tagged, through neglect or opposition to the present regulatory scheme. Most animals, however, will be tagged, but, even among these, some will lose their tags somewhere between the birthing pen and the slaughter house floor. To minimize “"slippage"” and to maximize the number of animals that are tagged with approved tags for the full duration of the animal's life, the Health of Animals Regulations require several actors in the production chain to tag animals which are either not yet tagged or which have lost their tags. If actors inside or beyond the farm gate do not tag as required, they face liability when tags are missing. Transporters of cattle are among those identified under the Health of Animals Regulations with such responsibilities.

However, having tags on the cattle at all times when they are being moved from location to location is the rule, and there is virtually no exception to the rule:

The Tribunal has no reason to doubt Mr. Morningstar's assertion made at the hearing that he is a conscientious producer who knows where his cattle originate and where they go to, or his assertion that he does his uttermost to ensure that cattle leaving his farm bear approved tags. However, in light of this analysis of the evidence, the Tribunal must conclude that the respondent has established, on a balance of probabilities, that the violation was committed. Therefore, the Tribunal orders the applicant to pay the penalty in the amount of $500 within 30 days after the day on which this decision is served.

Read the decision at: Doug Morningstar v. Canadian Food Inspection Agency.