In 2010, B.C. Farm Industry Review Board (BCFIRB) completed a supervisory review of accommodation levies in the dairy sector.
What was decided
The review examined accommodation levies charged by the B.C. Milk Marketing Board (BCMMB) on deliveries of milk and cream. This levy funded B.C.’s system for managing and transferring surplus milk, known as the ‘milk-on-demand’ system.
BCFIRB concluded that the levy no longer aligned with sound marketing policy.
On May 4, 2010, BCFIRB issued their decision. They directed BCMMB to:
- Repeal the accommodation levy within 6 months
- Commission an independent cost analysis to develop a new funding model
- Consult interest holders on the new proposed model
Decision on Milk Marketing Board’s Accommodation Levy Policy – May 4, 2010 (PDF, 254KB)
Why BCFIRB conducted this review
In early 2008, Saputo Inc., a dairy processor, filed an appeal under the Natural Products Marketing (BC) Act (NPMA). In their appeal, they asked BCFIRB to:
- Repeal the accommodation levy policy
- Reimburse accommodation levies already paid
BCFIRB dismissed the appeal on procedural grounds, because the appeal was based on a letter that did not constitute a formal decision by the BCMMB.
Although the appeal was not valid under the NPMA, BCFIRB recognized that it raised broader issues of public interest. It launched a supervisory review to examine whether the accommodation levy continued to reflect sound marketing policy.
Goal of the review
The main goal of the review was to determine whether the accommodation levy remained sound marketing policy.
Timeline of the review process
BCFIRB initiated the review on May 29, 2008, to address policy concerns raised in Saputo’s appeal. Saputo questioned whether the accommodation levy aligned with sound marketing policy under the Natural Products Marketing (BC) Act.
The review took place in four phases from May 2008 to May 2010. It involved input from BCMMB, Saputo Inc., and other industry interest holders.
Step 1: Define scope of review
BCFIRB directed BCMMB to review the issues raised in Saputo’s appeal. They were instructed to consult industry interest holders and produce a report outlining:
- The merits of Saputo’s concerns
- The potential benefits and drawbacks of repealing the accommodation levy
Step 2: Submissions
BCMMB submitted its report to BCFIRB on January 16, 2009. BCFIRB then invited and received further submissions from both BCMMB and Saputo.
On July 16, 2009, BCFIRB informed the parties that it would hold a supervisory hearing.
Step 3: Supervisory hearing
The supervisory hearing was held from March 8 to March 11, 2010. Participants included:
- B.C. Milk Marketing Board
- B.C. Milk Producers Association
- B.C. Dairy Council
- Saputo Inc.
- Vitalus Nutrition Inc.
Step 4: Final decision
BCFIRB released its final decision on May 4, 2010:
- Gave BCMMB a 6-month deadline to repeal the accommodation levy
- Directed BCMMB to consult interest holders and commission an independent cost analysis to develop a new funding model