No time limits on Agricorp debt collection activities, court rules

Monday, September 8, 2014

by SUSAN MANN

Several farmers are finding themselves even deeper in debt after an Ontario Superior Court judge ruled against their challenge of Agricorp’s ability to recover debts on overpayments more than two years old.

Last month, Ontario Superior Court Justice Marc L. Labrosse ruled that the provincial Crown corporation which administers farm risk management programs can recover debts from program overpayments that are more than two years old.

Even though the decision handed down Aug. 6 doesn’t surprise Renfrew County cow-calf beef and cash crop farmer Peter Tippins he was disappointed by it. “When you’re dealing with the government you don’t very often come out on top.” But “I don’t believe that government should be able to do whatever they like.”

Tippins was the representative farmer in the case that challenged Agricorp’s ability to recover government program overpayments from payments made, in some cases, to farmers 10 years ago. In all, 80 farmers were involved in the challenge.

Tippins says he really didn’t expect to win the case but he participated because he wanted to show “that not everybody likes to sit back and just say nothing.”

The hearing was held in May in Ottawa. The group’s lawyer, Don Good, argued Agricorp as an agent of the Crown is bound by the same two-year time limit under the Limitations Act that private companies have for recovering debt. The Crown, on the other hand, is exempt from the time limit and has an unlimited time to collect money it is owed.

Good couldn’t be reached for comment.

Labrosse says in his ruling the sole matter presented to the court was whether Agricorp, as a Crown agent, benefits from the exemption to the two-year time limit for debt recovery in the Act. He says in his opinion Agricorp is exempt from the time limit “and that it is not subject to the basic limitation period of two years under the Act for the commencement of a proceeding to recover a debt.”

The farmers’ group is also on the hook for $4,500 in court costs. Tippins says Good collected money from each of the participants and that money will go toward paying the costs.

Stephanie Charest, Agricorp spokesperson, says the judge ruled “all debts to the Crown are collectable regardless of when the debt was incurred.”

In 2012 Agricorp changed the way it recovers program overpayments to farmers.

Historically, overpayments were retrieved from future program payments but if a farmer didn’t participate in the same or similar programs in future years “Agricorp did not actively seek reimbursement,” the decision says.

An Agricorp factsheet about payment recovery on its website says the overpayments could have occurred because of incomplete program applications, processing errors, changes to farm operations and the nature of programs providing advance payments to financially distressed farmers.

In April 2012, Agricorp sent letters to 4,499 farmers telling them they had a program overpayment and they had to pay it back in three years. Collectively, the farmers owed $30.8 million.

The Crown corporation began adding interest in 2013.

By January 2014, nearly three quarters of the farmers owing money had made repayment arrangements. The arrangements are expected to generate $19.6 million, the decision says.

Tippins says Agricorp told him he owes slightly more than $18,000 in an overpayment from the former Canadian Agricultural Income Stabilization (CAIS) program. He received a payment from the program in 2007 but it wasn’t until 2012 that he was told he owed money back from it. The current AgriStability program has replaced CAIS. The amount he owes has grown to about $19,000 with interest added in.

The most troublesome aspect of the situation is every spring Agricorp sent out an invoice for the fee to participate in the program “but never on that invoice did it say I owed this extra money,” he says. “I almost feel like all our ancestors went to war for nothing. That’s why they went to war so governments couldn’t step on you like this.”

Now that the decision has been released Tippins says he won’t be joining any appeal if there is one, and he is making arrangements to repay the money. He doesn’t know if there will be an appeal. BF