Alsager v. Canada (Agriculture and Agri-Food)

Alsager v. Canada (Agriculture and Agri-Food)
Court (s) Database
Federal Court Decisions
Date
2011-09-14
Neutral citation
2011 FC 1071
File numbers
P-3-10
Decision Content
Health of Animals Act
Registrar of Appeals
Loi sur la santé des
animaux
Greffier des appels
Date: 20110914
Docket: P-3-10
Citation: 2011 FC 1071
Ottawa, Ontario, September 14, 2011
PRESENT: The Honourable Mr. Justice Russell, Deputy Assessor
BETWEEN:
RICK ALSAGER
Appellant
(or Mr. Alsager)
and
THE MINISTER OF AGRICULTURE AND AGRI-FOOD CANADA
Respondent
REASONS FOR JUDGMENT AND JUDGMENT
INTRODUCTION
[1] This is an appeal by Mr. Rick Alsager (Mr. Alsager or the Appellant) pursuant to section 56(1) of the Health of Animals Act, S.C. 1990, c. 21 (Act) of the final compensation awards (Decision) for the Appellant’s depopulated elk herd made in accordance with the valuation appraisal of Dr. Betty Althouse (Dr. Althouse), Canadian Food Inspection Agency (CFIA) Evaluation Committee Chair, dated May 6, 2010, (Evaluation Report). Mr. Alsager believes that Dr. Althouse and CFIA undervalued many of the animals in his elk herd that was depopulated by May 27, 2010. The animals were destroyed pursuant to a Destruction Order issued by the Minister of Agriculture and Agri-Food Canada (Minister) following a positive result of chronic wasting disease (CWD) confirmed by the National Laboratory in Ottawa of one of Mr. Alsager’s elk. The Minister has paid compensation to Mr. Alsager in accordance with the Decision but Mr. Alsager believes that some of his animals were unreasonably undervalued and he is appealing the amount of the assessment.
BACKGROUND
[2] The Appellant owns and operates a hunt ranch near Maidstone, Saskatchewan. Customers attend the Appellant’s ranch and pay to experience a trophy hunt in natural surroundings.
[3] On April 16, 2010 it was confirmed that one of the Appellant’s elk had tested positive for CWD, a transmissible spongiform encephalopathy that causes a progressive neurological disease in elk and other cervidae. CWD is generally believed to be caused by abnormal proteins called prions that affect the animal’s central nervous system. It is inevitably fatal.
[4] CWD is a reportable disease under the Act and the Reportable Diseases Regulations, SOR/91-2.
[5] Also on April 16, 2010, a Notice of Quarantine was issued by the CFIA to the Appellant pursuant to section 6 of the Health of Animals Regulations C.R.C., c. 296 that placed all cervids on certain parcels of the Appellant’s property under quarantine.
[6] On April 23, 2010, the CFIA issued a Notice of Requirement to Dispose to the Appellant pursuant to subsection 48(1) of the Act stating that destruction would occur by May 31, 2010.
[7] The Minister engaged the Appellant for the purposes of valuing his animals for purposes of compensation under the Compensation for Destroyed Animals Regulations, SOR/2000-233.
[8] An evaluation team approach was used which included: Dr. Althouse, chairperson on behalf of the CFIA; Roger Holland, an industry representative appointed by the Appellant; and Dr. Robert Hope, a representative of the CFIA.
[9] On April 27, 2010, a compensation meeting (Compensation Meeting) was held in North Battleford where the Appellant, his sons Jan and Lane, Roger Holland, Dr. Hope and Dr. Althouse were in attendance. Dr. Althouse was the chairperson for the evaluation with the appropriate delegated authority. General matters of valuation were discussed at the meeting and it was determined that Roger Holland and Dr. Hope would each produce his own report on the valuation of the elk. At the time of the Compensation Meeting, inventories of the elk were not available and so the number of elk to be depopulated and valued was estimated for the purposes of the reports.
[10] For bull elk, antlers are the basis for the Safari Club International scoring system (SCI) used by the industry to value male elk. The bull elk in this case had not yet fully grown their antlers for the 2010 season; antlers will generally grow in full in the autumn. Without the antlers to score and with little supporting documentation respecting the value of the animals, valuation was difficult in this case.
[11] Roger Holland and Dr. Holt completed their respective reports and submitted them to Dr. Althouse for consideration. On May 5, 2010 Dr. Althouse completed her Evaluation Report on a preliminary basis based on the estimation of inventory.
[12] By May 27, 2010, the Minister had depopulated the Appellant’s elk. The fallow deer, owned by the Appellant’s son, Lane Alsager, were also depopulated. The white-tail deer and the mule deer were not depopulated to allow the hunt ranch operation to conduct business in the Fall with respect to those animals, following which a complete depopulation occurred. During the depopulation of the Appellant’s elk, accurate inventories were established, confirming the ages of the animals, the states of pregnancy for the females, and the number of animals.
[13] On June 16, 2010 and June 21, 2010, in accordance with the Evaluation Report completed by Dr. Althouse, and in accordance with the true inventory numbers, the Minister issued Notices of Award of Compensation to the Appellant. Compensation Orders were also issued to Lane Alsager for the depopulation of the fallow deer.
[14] The Appellant received a total of $227,899.50 for the depopulation of his elk herd. Testing of the animals following depopulation resulted in a total of 24 positive test results for CWD. Compensation Orders were not issued for the white-tailed deer or the mule deer at this time as depopulation had not yet occurred.
[15] The Appellant filed a Notice of Appeal on or about July 28, 2010 pursuant to section 56 of the Act. In that Notice of Appeal he said that he wished “to appeal the compensation for my animals that were put down on my farm in May 31/10.” These animals were Mr. Alsager’s elk. The award of compensation for the white-tailed deer was issued 1 March 2011, and the white-tailed deer were not part of the animals that were destroyed on May 31, 2010. This means that Mr. Alsager has filed no Notice of Appeal concerning the white-tailed deer and they are not, strictly speaking, a part of this appeal. He says that his disagreement over the valuation of three of the white-tailed deer raises the same issues as he raises with regard to his elk, but the Respondent was not given proper notice that Mr. Alsager wished to appeal the valuations given to the three white-tailed deer which he disputes. It did not become apparent until the hearing that Mr. Alsager wished to question three white-tailed deer valuations. The Respondent has had no notice or opportunity to file written material or prepare evidence for this separate issue, and the Applicant has not complied with the Act and the governing regulations regarding an appeal of the three white-tailed deer valuations.
DECISION
[16] The Compensation Orders made in accordance with Dr. Althouse’s Evaluation Report constitute the Decision under appeal.
ISSUES
[17] The issue in this matter is limited to the question of whether the compensation paid to Mr. Alsager was reasonable in so far as specific animals are concerned which are identified in exhibit A-1 filed by Mr. Alsager.
LEGISLATION
[18] The following statutory provisions come into play in this appeal:
Health of Animals Act, S.C. 1990, c. 21
Disposal of affected or contaminated animals and things
48. (1) The Minister may dispose of an animal or thing, or require its owner or any person having the possession, care or control of it to dispose of it, where the animal or thing
(a) is, or is suspected of being, affected or contaminated by a disease or toxic substance;
(b) has been in contact with or in close proximity to another animal or thing that was, or is suspected of having been, affected or contaminated by a disease or toxic substance at the time of contact or close proximity; or
(c) is, or is suspected of being, a vector, the causative agent of a disease or a toxic substance.
…
Compensation to owners of animals
51. (1) The Minister may order compensation to be paid from the Consolidated Revenue Fund to the owner of an animal that is
(a) destroyed under this Act or is required by an inspector or officer to be destroyed under this Act and dies after the requirement is imposed but before being destroyed;
(b) injured in the course of being tested, treated or identified under this Act by an inspector or officer and dies, or is required to be destroyed, as a result of the injury; or
(c) reserved for experimentation under paragraph 13(2)(a).
Amount of compensation
(2) Subject to subsections (3) and (4), the amount of compensation shall be
(a) the market value, as determined by the Minister, that the animal would have had at the time of its evaluation by the Minister if it had not been required to be destroyed
Minus
(b) the value of its carcass, as determined by the Minister.
Maximum value
(3) The value mentioned in paragraph (2)(a) shall not exceed any maximum amount established with respect to the animal by or under the regulations.
Additional compensation
(4) In addition to the amount calculated under subsection (2), compensation may include such costs related to the disposal of the animal as are permitted by the regulations.
…
Appeal
56. (1) A person who claims compensation and is dissatisfied with the Minister’s disposition of the claim may bring an appeal to the Assessor, but the only grounds of appeal are that the failure to award compensation was unreasonable or that the amount awarded was unreasonable.
Time limit for bringing appeal
(2) An appeal shall be brought within three months after the claimant receives notification of the Minister’s disposition of the claim, or within such longer period as the Assessor may in any case for special reasons allow.
Mesures de disposition
48. (1) Le ministre peut prendre toute mesure de disposition, notamment de destruction, — ou ordonner à leur propriétaire, ou à la personne qui en a la possession, la responsabilité ou la charge des soins, de le faire — à l’égard des animaux ou choses qui :
a) soit sont contaminés par une maladie ou une substance toxique, ou soupçonnés de l’être;
b) soit ont été en contact avec des animaux ou choses de la catégorie visée à l’alinéa a) ou se sont trouvés dans leur voisinage immédiat;
c) soit sont des substances toxiques, des vecteurs ou des agents causant des maladies, ou sont soupçonnés d’en être.
…
Indemnisation : animal
51. (1) Le ministre peut ordonner le versement, sur le Trésor, d’une indemnité au propriétaire de l’animal :
a) soit détruit au titre de la présente loi, soit dont la destruction a été ordonnée par l’inspecteur ou l’agent d’exécution mais mort avant celle-ci;
b) blessé au cours d’un examen ou d’une séance de traitement ou d’identification effectués, au même titre, par un inspecteur ou un agent d’exécution et mort ou détruit en raison de cette blessure;
c) affecté à des expériences au titre du paragraphe 13(2).
Montant de l’indemnité
(2) Sous réserve des paragraphes (3) et (4), l’indemnité payable est égale à la valeur marchande, selon l’évaluation du ministre, que l’animal aurait eue au moment de l’évaluation si sa destruction n’avait pas été ordonnée, déduction faite de la valeur de son cadavre.
Plafond
(3) La valeur marchande ne peut dépasser le maximum réglementaire correspondant à l’animal en cause.
Indemnité supplémentaire
(4) L’indemnisation s’étend en outre, lorsque les règlements le prévoient, aux frais de disposition, y compris de destruction.
…
Appel
56. (1) Il peut être interjeté appel devant l’évaluateur soit pour refus injustifié d’indemnisation, soit pour insuffisance de l’indemnité accordée.
Délai d’appel
(2) L’appel doit être interjeté dans les trois mois suivant la notification à l’intéressé de la décision ministérielle contestée ou dans le délai plus long que l’évaluateur peut exceptionnellement accorder.
[19] Section 2 of the Compensation for Destroyed Animals Regulations is also relevant:
2. For the purpose of subsection 51(3) of the Act, the amount that is established as the maximum amount with respect to an animal that is destroyed or required to be destroyed under subsection 48(1) of the Act is
(a) if the animal is set out or included in column 1 of an item of the schedule, the amount set out in column 3 of that item; and
39. Elk (Cervus elaphus) Bull, 1 year and older Cervidae 8,000
40. Elk (Cervus elaphus) All elk other than those referred to in item 39 Cervidae, 4,000
…
43. White­tailed Deer (Odocoileus virginianus) Buck, 1 year and older Cervidae8,000
44. White­tailed Deer (Odocoileus virginianus) All White­tailed Deer other than those referred to in item 43 Cervidae 4,000
2. Pour l'application du paragraphe 51(3) de la Loi, la valeur marchande d'un animal qui est détruit ou qui doit l'être en application du paragraphe 48(1) de la Loi ne peut dépasser :
a) le montant prévu à la colonne 3 de l'annexe, pour tout animal visé à la colonne 1;
39. Cerf (Cervus elaphus) mâle non castré âgé d’un an ou plus Cervidés 8000
40. Cerf (Cervus elaphus) autre que celui visé à l’article 39 Cervidés 4000
…
43. Cerf de Virginie (Odocoileus virginianus) mâle non castré âgé d’un an ou plus
Cervidés 8000
44. Cerf de Virginie (Odocoileus virginianus) autre que celui visé à l’article 43 Cervidés 4000
ARGUMENTS
Appellant’s Position
General Introduction
[20] The Appellant (Mr. Alsager) believes that the current compensation scheme under the Act and the Regulations places too much power in the hands of government bureaucrats who are not knowledgeable in the elk and white-tailed deer industries and who are disposed to undervalue animals that have to be destroyed. As a result, he says that producers are being undercompensated in order to fulfill a government agenda to eradicate the industry. He believes that the Decision under appeal is illustrative of this general problem.
[21] Mr. Alsager says that the approach to valuation taken in the present case did not reflect the trophy business that he is in, and did not take into account the specifics of his business operations.
[22] In particular, Mr. Alsager says that the evaluation did not take into account the elite genetics of his elk herd. He has pursued a breeding program over a number of years aimed at producing elite elk bulls for the hunt trophy business that he runs on this property. He says that he does not breed animals that score under 400 on the SCI scale and that he does not have animals below a 380 score on his property, so that the lower SCI scores used in the evaluation of his elk were simply irrelevant to his trophy hunting business.
[23] Mr. Alsager explained to the Court that, following a previous depopulation of his animals in 2000, he began with a nucleus of top-quality elk to develop his own elite genetics. He says that horn genetics are largely carried on the female side even though it is the bull elks that are hunted for their trophy racks.
[24] Over a period of about 10 years, Mr. Alsager says he was able to see what kind of horn a bull was developing and this showed him which elk cows were producing the trophy bulls. If the bull had good horns he retained both the mother and the calf. If the bull did not have good horns then both mother and calf were destroyed. Cows that did not produce the required traits were eliminated. Over time, he says that he got his elk herd down to a group of cows with the genetics to produce the desired elite trophy bulls. In his view, this means that most of his elk score 400 plus on the SCI scale and this was not appreciated or taken into account when the 2010 evaluations were done by CFIA. He says that, although he had not kept and did not provide documentation to support elite status for his elk, Dr. Althouse and Dr. Hope should have known that his animals had achieved trophy genetics and so required the higher scores that he has identified.
[25] In relation to the elk cows, Mr. Alsager says they also should have been valued as elite animals even though only seven of them were found to be pregnant and 17 were open (i.e. not pregnant) when the time came to destroy them. The failed pregnancies occurred because of the bull he had used that particular year, not because of any problem with the cows. These cows would have produced calves in the future and their failure to produce in 2010 does not detract from their elite genetics and elite value. The cows should not have been valued at the slaughter price simply because they were open.
[26] Mr. Alsager also objects to the discounting of value that occurred because Dr. Althouse felt that the “value of a hunt does not equate with the value of the animal being shot. There are expenses associated with the hunt such as transportation, lodging, meals, guides, carcass and trophy preparation that are included in the hunt price.” Mr. Alsager says that he is not in the same position as an outfitter who guides hunters in search of animals in wild, public space. What he sells to his clients are private trophy animals on private land that have been specifically developed and bred. He says that all he sells is the animal so that his value should not be discounted to 55% to reflect the service value that occurs in other hunt operations. He points out that he successfully convinced Revenue Canada that he should not have to pay GST because he was not providing a service. He is simply selling the animal.
[27] All in all, Mr. Alsager does not take issue with the Minister’s approach to valuation as it applies to other, more usual, commercial contexts. The problem as he sees it is that the valuation approach used just does not allow for, or take into account, the specific genetic values that he has been able to achieve over a long and arduous process of selective culling and breeding, or the approach that he takes to marketing his elite trophy animals to hunters.
[28] As regards the three white-tailed deer that he claims were undervalued, Mr. Alsager says that the evaluation does not recognize the higher quality animals that he breeds.
Specifics
[29] Mr. Alsager says there are two main points of dispute regarding the evaluation of his elk. The first issue is the failure of CFIA to recognize and take into account the elite genetic values of his elk.
[30] He says that CFIA has a mind set that all elk are the same and all herds are the same. This has led to the creation of the valuation graph or grid that was applied to his animals. His herd was a select trophy herd. All his bulls were 400+ on the SCI scale. All small and inferior heads were culled at two years. There were only cows of 400+ genetics; all cows that did not produce 400+ genetics were culled. Therefore, Mr. Alsager says that the CFIA graph and value of bulls less than 380 did not apply to his animals.
[31] He says that the CFIA average price on cows did not apply to his herd either because he had culled all cows that produced average bulls. He claims that cows are consistent in the style of horns and bull calves they produce and the genetics of antlers is heavily determined by the cow. In addition, the CFIA assumption that an open cow is only worth meat value shows that CFIA is deliberately cheating him. Open cows are sold for breeding all the time. If he were to purchase and replace these 30 cows, they most likely would be purchased open and prior to breeding, as is the normal procedure. These quality cows can only be purchased at a few established producers that have bred for the required genetics over the past 10 to 20 years. It takes time to establish a consistent herd like this.
[32] Mr. Alsager says that just because a cow is open (i.e. not pregnant) does not change her genetics. Mr. Alsager experienced a failure with the breeding bull in the fall in 2009, which meant he was out of calves for that year. He says he had a personal major health issue that Fall and he did not watch the bull close enough. All other livestock breeds with good genetic females sell for as much as bred cows. Mr. Alsager’s cows were physically sound cows. In 2009 he had 30 calves for 29 cows. Just because a cow is open does not reduce her to meat value. CFIA did not show these cows to be non-productive at the time of being slaughtered; they all had healthy uteruses. CFIA examined all females at the time of slaughter; all these cows had calved in the previous years. In past years, Mr. Alsager had always examined any dry cow prior to breeding to make sure it was sound. This was done by the Turtleford vet, Dr. Miles Johnson.
[33] Mr. Alsager says that many of these points were explained at the Evaluation Meeting that took place in North Battleford, on April 27, 2010, but were completely ignored by Dr. Hope and Dr. Althouse. He says they either did not understand, or they did not choose to bargain or act in good faith. Mr. Alsager believes that Dr. Hope and Dr. Althouse did not understand because they are not knowledgeable about elk and deer in his business. This would not have happened if the evaluation had been conducted, as it had been in the past, by industry people who understand genetics. An acceptable value would have been made that day at the meeting, instead of not knowing what the compensation would be until after the animals were destroyed.
[34] Mr. Alsager says that the present approach to evaluation leads to all the trouble of court trials and is a waste of time and taxpayers’ money. Using people that have no knowledge of the relevant issues is not how evaluations should be conducted.
[35] Mr. Alsager says there was no real evaluation team. Also, there was no negotiation of values. He believes that CFIA came in with a pre-determined value on his animals that suited CFIA. He also believes that this approach supports the government agenda to bankrupt producers and destroy an industry that threatens the monopoly that the government has in the cervid hunting industry. Dr. Hope is not an expert in this industry and there is a conflict of interest in his being an employee of CFIA. His comments show a bias and a total lack of knowledge in the business. Dr. Althouse should not be able to dictate values; this is another conflict of interest because she has no knowledge of the animals or the industry. Dr. Hope simply compiled some numbers of what the average elk scores are in Saskatchewan. He did not assess Mr. Alsager’s animals and their particular genetic values.
[36] Mr. Alsager says that Dr. Hope and Dr. Althouse came to the Evaluation Meeting with their numbers. CFIA had already decided what was going to be paid, and there was no consideration of what Mr. Alsager presented. There was no discussion about Mr. Alsager’s input; they just listened to what was said, and then asked him and his team to leave. He believes they did not understand what his team (Roger Holland, Lane, Jan and Mr. Alsager) were talking about.
[37] Mr. Alsager is of the view that Dr. Hope believes all elk herds are the same, which is completely incorrect. Dr. Hope does not understand genetics. Most (80%) of the elk in the industry are commercial animals raised on new farms by people with limited knowledge, such as Dr. Hope. These animals are raised for velvet production. The graph that Dr. Hope produced for valuation purposes shows this. 80% of these animals do not even qualify for trophies. Many producers bailed out of the industry because they had velvet bulls that were not used for hunt ranches. Hence, the cheap prices. Most growth in the industry occurred between 1996- 2000. Many new producers bought animals from ROP records strictly for velvet production. Velvet dominated the market at that time. Only a small percentage of breeders (mainly people who had been breeders since the early 90s) were starting to select for trophy genetics. A desirable velvet bull has a short brow, bez, and trez tines with the straight beam, usually a 5x5 or 6x6 point bull. These traits do not make good trophies; these are the bulls that fall into the 375 and under category on the SCI scale. It was not until the collapse of the velvet market in 2000 that producers started concentrating on trophy genetics. This is why 90% of the bulls at that time were let go at meat prices. A few trophy farms thought they could capitalize on these cheap bulls, but they found out very quickly there was no demand for small trophies.
[38] Mr. Alsager says he has been in the business of breeding deer and elk for 30 years. He says his elk have won more trophies and competitions, and he has had more high-selling animals, than anyone else.
[39] Mr. Alsager says that his hunting operation attracts the elite hunters in the business because his stock has the reputation for being top trophies. His clientele are people such as the top management of Pepsi-Cola, directors of the Bank of America, the owners of several casinos in Las Vegas, Hank Williams Junior, Tommy Wilcox, Johnny Lee, John Stone, Rhett Atkins, NFL football players, Steve Mott and Kenny Stabler, and other executives of many other large companies.
[40] These people do not shoot bulls under SCI 380, and they do not shoot deer under 170. Mr. Alsager does not keep elk bulls on his property that do not score 380+ on the SCI scale, and most of them are well over 400. They are culled out at two years of age. He has select cows with 400+ genetics; there are very few two-year-olds that need culling. The same goes for his deer.
[41] Mr. Alsager says he has been criticized by Dr. Althouse because he does not keep records or pedigrees or use artificial insemination. She thinks that, because of this, he does not know what he is doing.
[42] Mr. Alsager says he has sold breeding bulls all over the world and these animals have dominated the industry from the US, New Zealand, Australia and all over Canada. He will not sell a bull that is not an elite breeder. He feels that Dr. Althouse and Dr. Hope must think that he is just lucky in picking these animals. Pedigrees and records were used mainly for body weights and velvet production that producers used as marketing tools to sell their animals. Mr. Alsager used ROP records when he was selling breeding stock. Since 2000 there has been no breeding market for him (or anyone for that matter). His breeding program since then has been specifically for his own trophies, and ROP records were of no use to him. He says he learned 25 years ago how to assess a bull by his first rack on whether he had the potential to make SCI 400+ points. All his cows were proven and selected to produce calves that would grow SCI 400+ racks.
[43] A bull must have an extra long trez tine and a good bell shape beam with 7+ points. Without this he will be one of those 300+380 bulls. Mr. Alsager says he kept no bull past two years that did not have the right rack.
[44] Mr. Alsager kept records of his cows and their progeny until the bull was two years old. If the bull did not have the good trez and long beam and 7+ points, then he was slaughtered and his mother also got her head cut off. Cows consistently produce offspring with similar racks. When these cows are bred to big bulls (SCI 460-520), if the genetics are not in the cow, they do not consistently produce big bulls, as horn style is determined by the cow.
[45] After the government destroyed all his elk in 2000 Mr. Alsager started again with 30 females. Over the next 10 years he eliminated over 40% of these cows and replaced them with offspring that had SCI 400+ genetics.
[46] He says that all the bulls he has ever used for breeding have scored 450+520, so there is no reason for him to use artificial insemination because there is no advantage to be gained. This is because he is not selling breeding stock; he is producing trophies for himself and, when it comes to any males he purchases, he knows what he is getting by looking at the animal, not by looking at some useless piece of paper. Any bull raised on his property was culled by two years of age if it did not have SCI 400+ potential. This also applies to the deer he purchased.
[47] Mr. Alsager says that, once you have an animal that has the right style and form of horn, the rest is just “giving him the groceries.” He believes that CFIA staff are not qualified to dictate the values of animals. The valuation graph they have devised only applies to average animals in the province and is totally irrelevant to the genetics on Mr. Alsager’s farm and is, in any event, 10 years outdated.
[48] Mr. Alsager says there are only a few farms left that have animals of similar genetics that Mr. Alsager can use to replace his animals. Mr. Alsager does not discuss mule deer values because he says there is going to be no more “murdering of deer on my property.” He also says there will be no more business done with CFIA. Dr. Hope and Dr. Althouse made statements that the mule deer market is limited when, in fact, there is a huge demand and prices are twice that of whitetail. Mr. Alsager says he has the best and largest herd of mule deer in the country. This cannot be just luck. It is because he knows what he is doing. Dr. Hope checked with other deer breeders and the values of their stock, as well as the prices they sell them for, and what Mr. Alsager buys them for, and his comment was that they were unreasonable. But it is Dr. Hope and CFIA who are unreasonable. Every evaluation CFIA has done in the past two years has ended in disagreement with the producers.
[49] The second major point of contention is the 45% discounting of value that occurred in relation to his bull elk to reflect the alleged service costs of Mr. Alsager’s trophy business. Mr. Alsager suggests that the Court make a recommendation to the Minister to change the valuation procedure back to the way it was before, and make government people stick to disease control. The present evaluation process is flawed and was designed to destroy the industry and put producers out of business. The notion that an animal is only worth 55% of price of the trophy value is a joke. A farmer who sells a beef bull does not get 55% of the selling price if he is depopulated. Such farmers have marketing and production costs; they entertain buyers who come to choose a bull. Mr. Alsager’s business is no different. He produces animals for sale and the sale price is what he expects. Outfitters who take out a hunter on a guided hunt for wild animals do not own the animal or have any costs of producing them; they only supply a service, which is completely different from livestock producers such as Mr. Alsager. Revenue Canada acknowledges this difference. Mr. Alsager has been audited on the issue of GST and it has been determined that he does not have to charge GST. Most of his clients kill the animals they choose on the first day and are not there for two weeks, as is the usual case with an outfitter of wild deer.
[50] Mr. Alsager believes that evaluation used to be a fair process. A group of knowledgeable people in the industry with no conflict of interest, and unrelated to CFIA and the producer, were used as evaluators.
[51] These people sat around the table and agreed on fair values; it was all done in one afternoon. Once that was done, CFIA came in and dealt with the disease issues. If the producer disagreed or felt something had been overlooked, he could further explain at that time.
[52] In Mr. Alsager’s view, certain people in CFIA changed this procedure, not by request of the Minister, but by themselves to advance their agenda to destroy the industry. They dictate a ridiculous value, put producers at the disadvantage of dragging a simple evaluation through the courts, have no knowledge of the industry, and are totally funded at the taxpayers expense to the financial hardship of the producer. The present dispute has already taken over a year, and who knows how much longer it will go on. Mr. Alsager says he expects fair compensation for his animals and he also says he should get compensation for the delay and hardship created by this procedure.
Respondent’s Position
[53] The Respondent says that the issue in this application is limited to the question of whether compensation paid to the Appellant for his depopulated elk is reasonable. Section 56 of the Act states as follows:
Appeal
56. (1) A person who claims compensation and is dissatisfied with the Minister’s disposition of the claim may bring an appeal to the Assessor, but the only grounds of appeal are that the failure to award compensation was unreasonable or that the amount awarded was unreasonable.
Appel
56. (1) Il peut être interjeté appel devant l’évaluateur soit pour refus injustifié d’indemnisation, soit pour insuffisance de l’indemnité accordée.
[54] In Siclo v Canada (Minister of Agriculture and Agri-Food), 2004 FC 871, Justice Edmond Blanchard noted at paragraph 54 that in terms of the adequacy of compensation pursuant to the Act, “we must rely on the test of what is reasonable.”
[55] In Ferme Avicole Héva Inc. v Canada (Minister of Agriculture), [1998] FCJ No 1021, Justice Danièle Tremblay-Lamer stated at paragraph 38 that lost profit or value to the owner was not the same as market value when determining compensation:
It has been established in the case law that the value to the owner does not correspond to fair market value, and that the compensation was not intended to compensate the owner for its lost profits by putting it back into the same position as it was in before the animals were destroyed.
[56] In Siclo, above, Justice Blanchard outlines the applicable legislation, beginning at paragraph 22 of his decision, respecting the Minister’s authority to order the destruction of animals and the discretion to order compensation corresponding to the fair market value of the animal at the time off its destruction:
Section 48 of the Animal Health Act authorizes the Minister to order the destruction of animals which are, or are suspected of being, affected or contaminated by a disease. Under section 51, when the owner’s animals are destroyed the Minister may order compensation to be paid to the owner. At the same time, under subsection 51(2), the compensation payable to the owner must correspond to the market value of the animal minus the value of its carcass, as determined by the Minister, at the time of the appraisal if its destruction was not ordered.
[57] Section 48(1) of the Act states as follows:
Disposal of affected or contaminated animals and things
48. (1) The Minister may dispose of an animal or thing, or require its owner or any person having the possession, care or control of it to dispose of it, where the animal or thing
(a) is, or is suspected of being, affected or contaminated by a disease or toxic substance;
(b) has been in contact with or in close proximity to another animal or thing that was, or is suspected of having been, affected or contaminated by a disease or toxic substance at the time of contact or close proximity; or
(c) is, or is suspected of being, a vector, the causative agent of a disease or a toxic substance.
Mesures de disposition
48. (1) Le ministre peut prendre toute mesure de disposition, notamment de destruction, — ou ordonner à leur propriétaire, ou à la personne qui en a la possession, la responsabilité ou la charge des soins, de le faire — à l’égard des animaux ou choses qui :
a) soit sont contaminés par une maladie ou une substance toxique, ou soupçonnés de l’être;
b) soit ont été en contact avec des animaux ou choses de la catégorie visée à l’alinéa a) ou se sont trouvés dans leur voisinage immédiat;
c) soit sont des substances toxiques, des vecteurs ou des agents causant des maladies, ou sont soupçonnés d’en être.
[58] Section 51 of the Act addresses compensation to owners of animals:
51. (1) The Minister may order compensation to be paid from the Consolidated Revenue Fund to the owner of an animal that is
(a) destroyed under this Act or is required by an inspector or officer to be destroyed under this Act and dies after the requirement is imposed but before being destroyed;
(b) injured in the course of being tested, treated or identified under this Act by an inspector or officer and dies, or is required to be destroyed, as a result of the injury; or
(c) reserved for experimentation under paragraph 13(2)(a).
Amount of compensation
(2) Subject to subsections (3) and (4), the amount of compensation shall be
(a) the market value, as determined by the Minister, that the animal would have had at the time of its evaluation by the Minister if it had not been required to be destroyed
Minus
(b) the value of its carcass, as determined by the Minister.
Maximum value
(3) The value mentioned in paragraph (2)(a) shall not exceed any maximum amount established with respect to the animal by or under the regulations.
Additional compensation
(4) In addition to the amount calculated under subsection (2), compensation may include such costs related to the disposal of the animal as are permitted by the regulations.
51. (1) Le ministre peut ordonner le versement, sur le Trésor, d’une indemnité au propriétaire de l’animal :
a) soit détruit au titre de la présente loi, soit dont la destruction a été ordonnée par l’inspecteur ou l’agent d’exécution mais mort avant celle-ci;
b) blessé au cours d’un examen ou d’une séance de traitement ou d’identification effectués, au même titre, par un inspecteur ou un agent d’exécution et mort ou détruit en raison de cette blessure;
c) affecté à des expériences au titre du paragraphe 13(2).
Montant de l’indemnité
(2) Sous réserve des paragraphes (3) et (4), l’indemnité payable est égale à la valeur marchande, selon l’évaluation du ministre, que l’animal aurait eue au moment de l’évaluation si sa destruction n’avait pas été ordonnée, déduction faite de la valeur de son cadavre.
Plafond
(3) La valeur marchande ne peut dépasser le maximum réglementaire correspondant à l’animal en cause.
Indemnité supplémentaire
(4) L’indemnisation s’étend en outre, lorsque les règlements le prévoient, aux frais de disposition, y compris de destruction.
[59] The Minister’s discretion to compensate is limited by maximum amounts established under the Regulations. Section 2 of those Regulations provide:
2. For the purpose of subsection 51(3) of the Act, the amount that is established as the maximum amount with respect to an animal that is destroyed or required to be destroyed under subsection 48(1) of the Act is
(a) if the animal is set out or included in column 1 of an item of the schedule, the amount set out in column 3 of that item; and
(b) in any other case, $30.
2. Pour l'application du paragraphe 51(3) de la Loi, la valeur marchande d'un animal qui est détruit ou qui doit l'être en application du paragraphe 48(1) de la Loi ne peut dépasser :
a) le montant prévu à la colonne 3 de l'annexe, pour tout animal visé à la colonne 1;
b) 30 $, dans tout autre cas.
[60] In the particular case of elk, the schedule, pursuant to the above noted section 2(a) of the Compensation for Destroyed Animals Regulations, provides the maximum amount the Minister may award as follows:
39. Elk (Cervus elaphus) Bull, 1 year and older Cervidae 8,000
40. Elk (Cervus elaphus) All elk other than those referred to in item 39 Cervidae, 4,000
39. Cerf (Cervus elaphus) mâle non castré âgé d’un an ou plus Cervidés 8000
40. Cerf (Cervus elaphus) autre que celui visé à l’article 39 Cervidés 4000
[61] In Donaldson v Canada (Minister of Agriculture), 2006 FC 842, Justice Michael Kelen stated at paragraph 16 that the proper approach when determining the reasonable amount to award for the compensation of an animal destroyed under the Act is the market value that the animal had at the time of destruction, subject to any maximum amount referred to in subsection 51(3) of the Act.
[62] The Appellant was awarded $226,750 for the elk and $1,149.50 for miscellaneous expenses for a total amount of $227,899.50. The amount was arrived at based on a number of considerations that included, but were no