Marketing boards – who has the power to licence?

Does a local marketing board have the legal right to delegate to a registrar the power to grant, renew, suspend or revoke a licence to produce, market or process a regulated product? In a recent case considering this issue, the Ontario Court (General Division) determined that such delegation of authority by a local board, under the Ontario Farm Products Marketing Act, is improper if that local board thereby relinquishes control over a significant portion of its decision-making authority.

In this case, the Ontario Greenhouse Vegetable Producers’ Marketing Board had sued various producers of greenhouse vegetables for payment of a licensing fee. That fee was to be applied to a 51.5 million debt which had been incurred through mismanagement of the Board. The Board argued that it could charge the licensing fee under the provisions of a regulation enacted by that same Board, which also included provision for the appointment of a registrar. Under that regulation, the appointed registrar was empowered by the Board to refuse to issue a licence “where, in the registrar’s opinion, the applicant is disentitled to a licence” according to the criteria defined in the regulation.

While the regulation also provided for a hearing before the local board if the applicant objected to the registrar’s decision, the court noted that the registrar’s decision would be considered final and absolute if the registrar accepted the application and issued a licence, or if the registrar rejected the application and the applicant failed to file a written notice requiring a hearing by the local board. In addition, the court noted that the registrar had the power to require an applicant to verify information by affidavit; the regulation contained no provision for appeal of such a decision.

In reviewing the concept and function of the registrar under the regulation, the court held that the position could not be described as solely administrative. With respect to the purported delegation of the local board’s licensing power to the registrar, the judge stated:

    “The power to grant or refuse a licence is not a trifling one. Under the impugned regulation, without a licence, no one can produce or market greenhouse vegetables in Ontario. When the issue is financial survival, it does not seem to me to be an adequate comment on the registrar question to say that there are various levels of appeal available in the event of a refusal to license. In my opinion, the decision to grant or refuse a licence is one that must be made by the local board pursuant to its…powers…and it cannot sub-delegate that decision. It was, therefore, beyond the regulatory capacity of the local board in its licensing regulation for the delegation of its decision-making power on licence applications to an appointed registrar.”

Thus, at least in Ontario, the courts may refuse to sanction licensing decisions of local marketing boards where the board itself has delegated so much power to the registrar that the court determines the board has lost its decision-making power. In considering this issue, the right to a hearing before the board is not determinative. In such cases, the courts will assess whether the registrar’s role is simply that of an administrative employee of the board, or whether the registrar’s decision-making authority may be characterized as final and absolute.

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