HIGHLIGHTS

  • The Supreme Court of Canada has concluded that Quebec's ASRA Farm Income Stabilization Program is not a subsidy program governed by public law, but a contract governed by private law principles under Quebec law. The Court has also concluded that the contract is an innominate contract - not a contract of insurance within the meaning of the Civil Code of Quebec which must be interpreted based on the "reasonable expectations of the insured". However, La Financiere agricole du Quebec, which administers the ASRA Program, is nevertheless required to exercise its contractual powers in accordance with the requirements of good faith and contractual fairness. The Court concluded that La Financiere did act in good faith and contractual fairness when making a collective adjustment to the benchmark farm income as a result of federal subsidies paid to farm producers in 2007, rather than making adjustments for these subsidies on an individual basis. The Court upheld the Quebec Court of Appeal's dismissal of a $14.9 million judgment granted by the Quebec Superior Court in favour of 137 Quebec agricultural producers. [Editor's note: Although this decision deals with a Quebec income stability program under the Civil Code of Quebec, the fundamental principles with respect to whether farm income stabilization programs should be viewed as subsidy programs governed by public law, or contracts governed by private law, and the degree to which the discretion exercised by provincial agencies which administer these programs are limited by the wording of the programs, contractual fairness and good faith may apply to common law income stabilization programs in other provinces as well.]. (Ferme Vi-Ber inc. v. Financiere agricole du Quebec, CALN/2016-018, [2016] S.C.J. No. 34, Supreme Court of Canada)
  • In this companion decision to the Ferme Vi-Ber case, the Supreme Court of Canada dismissed the claim of a number of Quebec hog and piglet producers who argued that La Financiere improperly reduced coverage for the years 2006 to 2008 based on La Financiere's alleged improper reliance on a statistical study La Financiere used to establish the benchmark for Quebec hog producers in 2006 to 2008. (Lafortune v. Financiere agricole du Quebec, CALN/2016-019, [2016] S.C.J. No. 35, Supreme Court of Canada)

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