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Major arbitration of the 2018 Chicken Marketing Agreement by the Québec Agricultural and Food Marketing Board

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Confidential Client

In a decision described by the Board as historic, on June 22, 2018, the Board rescinded the resolution of the Éleveurs de volaille [Poultry Farmers of Québec (PFQ)], as well as the Notice of Revocation communicated by the Farmers. After 44 days of public hearings and more than 29 witnesses, the Board ruled that it could not agree with the position supported by the PFQ of setting up a free market in Québec for the supply of Processors with live chickens intended for processors. In the same vein, the Board considered it essential to maintain the balance of power between the production and processing components and upheld the supply rules within the Agreement.

In this case, the Board arbitrated two opposing visions: the free market for supplies in Québec supported by the PFQ vs. the guaranteed supply volume harmonized with Ontario supported by the AAAQ. In addition, the PFQ sought to end the Memorandum of Understanding between the Chicken Farmers of Ontario (CFO), the Association of Ontario Chicken Processors (AOCP) and the Québec Association of Poultry Processors (AAAQ). This Memorandum, which represents a long process of consultation with the main players in the industry, aims in particular to solve the problem of interprovincial movement of chickens, called “irrational,” between Quebec and Ontario. The Memorandum had also been incorporated in the Appendix to the Board’s 2012 arbitration decision, which was intended to establish supply rules for Processors. The AAAQ requested that the Board render the Notice of Revocation of the Memorandum unenforceable and maintain the guaranteed supply volume (GSV) for the purchasers of live chickens, in a way that is harmonized with Ontario.

The evidence submitted by the parties allowed the Board to conclude that it is appropriate for orderly and effective marketing to maintain specific rules in the Agreement concerning the assignment of GSVs to Processors and the harmonization of these rules with Ontario. The Board relied on the 2012 arbitration decision, among others. The PFQ were proposing to modify a proven system. The Board concluded that the evidence presented did not justify the major changes to the Agreement proposed by the PFQ. In total, five (5) experts in areas such as agricultural economics, economics and econometrics were heard before the Board.

The Fasken team that successfully advised the Québec Association of Poultry Processors (the plaintiffs) is composed of Karl Delwaide and Antoine Aylwin.



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