Industry Regulation

• Author: International Law Group

The Vegetable Marketing Commission (VMC) is a regulatory body set up under the British Columbia Vegetable Scheme to administer the plan under the supervision of the Vegetables Marketing Board.(VMB).

In 1996, the VMC appointed B.C. Hothouse Foods, Inc. (Hot House) as the sole agent for marketing greenhouse vegetables grown in the Lower Mainland area of BC and on Vancouver Island. Hot House then entered into Grower Marketing Agreements (GMAs) with the growers it represented.

In 2000, the United States filed a trade action against Canadian greenhouse tomato growers. It alleged that the growers were dumping, that is, selling their goods in the U.S. at prices lower than they were asking in B.C. Hot House took it upon itself to orchestrate the B.C. Industry's response to the action. In 2001, an outfit calling itself "Global Growers" and others, asked the VMC to choose Global as their marketing agent to replace Hot House.

One month later, the VMC laid a special levy upon all greenhouse tomatoes produced in 2001 in order to pay the costs of the trade dispute. It also recommended to the VMB that it accord agency status to Global. At the outset, Global growers did not ask the Commission to cancel their GMA's with Hot House; it did so in 2002, however, after it became clear that the parties could not agree on how to go about the terminations. The VMC declined to comply. The Board then agreed to consider written submissions about the GMA terminations and other issues but turned down Global's request for a full hearing.

This led Global to withdraw from the review process, and to seek an injunction to prevent the VMB from proceeding. The B. C. court of first instance rejected that application. In July 2002, the VMC came out with its recommendations to the Board. The following month, the Governor General in Council adopted a regulation that empowered the VMC to impose levies on growers and to use the proceeds to pay litigation expenses and to make up for losses from the sale or disposal of vegetables during any period of time.

In September, the VMB issued its report. In dismissing Global's application for judicial review, the court found (1) that the Board's action lay within with its general supervisory authority and (2) that the evidence fully supported its findings of fact. The court held that the Commission had virtually unlimited powers to regulate the production and marketing of vegetables, including the authority to collect levies. The major...