Non-resident sheep producers exempt from Ontario Sheep Farmers licence fee

The Ontario Sheep Farmers organization will change its regulations to limit fees charged to non-resident producers.

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The Agriculture, Food and Rural Affairs Appeal Tribunal recently delivered its decision regarding Ontario Sheep Farmers (OSF) charging licence fees to non-resident producers. Board chair Art Alblas told producers at OSF’s annual meeting Oct. 25 that the organization has been given 60 days, from the Sept. 16, 2024 ruling, to amend its regulations.

Why it matters: The appeal focused on the interpretation of OSF provisions relating to the collection, exemption and overall licence fees related to livestock sold by out-of-province sheep producers.

“We are working with the Ontario Farm Products Marketing Commission to ensure that the amendments are clear and concise,” said Alblas, adding that there will be no further statements on the legal process, which is still active, until after Nov. 15.

In 2022, Alberta sheep producers Robert Albers and Matt Lynch challenged the licence fee levied by Ontario Sheep Farmers to non-resident sheep and wool producers, and the matter went before the provincial appeal tribunal.

The tribunal removed Lynch’s complaint because he was no longer a sheep producer when the hearing began and was “no longer an aggrieved person.”

According to the document, Albers, who produces 4,500 lambs and buys and finishes upwards of 145,000 lambs on his Alberta farm, was charged $2.20 per head for animals sold into Ontario after Oct. 1, 2023.

Before that, Albers said he was charged $1.80 per head, in line with the check-off for animals he sold in British Columbia. He indicated that the additional 40 cents represented OSF’s licence fee.

During the hearing, Canadian Sheep Federation executive director Corlena Patterson testified that sheep producer organizations from several provinces asked for, and were granted, CSF’s support to challenge OSF’s practice of charging licence fees on out-of-province lambs.

The tribunal stated that Ontario sheep producers pay the licence fee when they sell their livestock, and the buyer is responsible for collecting the money and remitting it to OSF. However, buyers of out-of-province sheep pay the licence fee on the purchase.

“In the above scenario, the appellant (Albers) alleges that he is being unlawfully charged with the Ontario licence fee,” stated the decision. “OSF alleges that he is not and that the deduction from his sale proceeds is being made pursuant to his agreement with the processor or auction market.”

This issue of collecting fees on out-of-province lambs/sheep was brought to the attention of the OSF (then known as the Ontario Sheep Marketing Agency) by the marketing commission in January 2014. In March 2015, OSF was advised that it had no authority to collect out-of-province licence fees and must cease the practice.

After extensive collaboration between the two entities, the general regulation was amended effective Jan. 1, 2017, and amended again on Oct. 1, 2023, to change the licence fee amounts on sheep.

The current decision requires the OSF to amend Section 6 of the General Regulations to include Subsection 6(c), reading, “No licence fee shall be charged to a non-resident producer, either directly or indirectly. Licence fees are payable by Ontario producers only.”

Additionally, it must direct all brokers, dealers, auction marts or processors who receive sheep or wool to immediately stop deducting licence fees from non-resident producer sales proceeds.

“The OSF board amended its general regulations in 2017 to provide that out-of-province producers were not required to hold a producer license from OSF and were not required to pay license fees,” Alblas said. “This remains unchanged, so we do not anticipate any impact on our OSF budget as a result of the tribunal decision.”