Friday, December 21, 2012

Bourdeau files another motion

Toronto – Court records here indicate that whistleblower Norman Bourdeau has filed a response to the motion made by lawyers for L.H. Gray & Son Ltd. to seal all of the court documents related to the Sweda Farms lawsuit against Gray, Burnbrae and the Ontario egg marketing board.

Bourdeau says that sealing the documents would hamper an inquiry he and lawyer Donald Good are seeking from the Ontario Farm Products Marketing Commission.

Bourdeau wants to file documents that indicate cheating on egg grading. That cheating has a direct bearing on revenues collected by the Egg Farmers of Ontario marketing board which is under the direct supervision of the commission.

But Bourdeau points out in his court document that the commission advised him in a Nov. 21 letter that anything filed with it could be released under a Freedom-of-Information request.

That would mean that no documents under a court sealing order could be submitted to the commission.

Bourdeau says the net effect “will suppress important evidence supporting allegations raised with the Commission for investigating the conduct of Egg Farmers of Ontario.”

Gray’s lawyers have already obtained a sealing order on court documents filed before the summer, but that order does not extend to documents filed since then, including a new motion from Sweda Farms (represented by Good) to consolidate its separate lawsuits against Gray, Burnbrae and the egg board into a single lawsuit accusing them of conspiracy to drive Sweda out of the egg-grading business.

Bourdeau’s court motion reveals that the Ontario Farm Products Marketing Commission is considering the requests for an inquiry, but set a deadline of Nov. 30 for them to submit documents to back their allegations.

Bourdeau filed his original request for a commission inquiry on Dec. 22, 2010, and Good, acting on behalf of Verified Eggs Canada, filed later.

Bourdeau notes in the court filing that the egg board relies on grading reports from egg-grading stations to collect levies and says “there is evidence to support the allegation that at least five to seven per cent under-grade eggs (including Grade C and dirts) are intentionally graded into the Canada Grade A.”

The egg board charges no levy on eggs that are not Canada Grade A. Based on annual levies of more than $70 million and five per cent undergrades paying levies, Bourdeau estimates the egg board is collecting an extra $1.8 million a year.

Egg farmers also benefit by receiving a higher price for the undergrades that are passed as Canada Grade A eggs.

Bourdeau also cites Canadian Food Inspection Agency egg-detention orders to bolster his allegation that the data the egg-grading stations provide the marketing board are flawed.

Bourdeau says the automated grading machines at L.H. Gray and Son Ltd. are “intentionally set to allow 6.6 per cent under-grades (four eggs in 60) into all graded product before QC (quality control) can consider re-grading or fail a small portion of the lot.)

Bourdeau was head of information technology for Gray and has electronic records to substantiate his claim.

Bourdeau says the egg marketing board accepts a “tolerance” based on the Canadian Food Inspection Agency, but Bourdeau says the CFIA tolerances are only for “when eggs are inspected at a place other than where they were graded or packed”.

Bourdeau says “there is (sic) NO tolerances at the candling table of the Grading Machine when the carton is closed and labeled Canada Grade A”.

Bourdeau cites egg board documents to indicate it has the authority to “search egg grading stations for evidence of violations of the rules or “inspection of egg grading facilities”. If EFO (Egg Farmers of Ontario) has this authority, it should be exercised.”

Harry Pelissero
The egg board used to inspect egg-grading stations when Brian Ellsworth was the general manager. That ended when Harry Pelissero took over.

Bourdeau also says Gray chooses producers each week to participate under the egg board’s “nest run” program and says “these eggs are almost always of poor quality and in violation of the Nest Run Grade Regulations.”

He said the incidence of cracks and dirts can run as high as 25 to 30 per cent and also accuses Gray of “padding” the nest-run eggs with eggs that its retail customers return or eggs that are culled out during grading of “table-market” eggs. The board pays full price for nest-run eggs out of the national “Industrial Product Fund”.

Farmers’ levies are used to generate that fund which is supposed to underwrite losses on removing surplus eggs from the Canadian market and diverting them to egg-processing plants.

Gray and Burnbrae also own egg-processing plants in addition to their control over about 90 per cent of Ontario’s egg grading and ownership of the largest egg-farming businesses.

Bourdeau also outlines why the marketing of cracks as Canada Grade A eggs poses a threat to consumer health and notes that there is a specific federal regulation banning the retail sale of Grade C (i.e. cracked) eggs.

Another federal regulation says “no person shall pack, mark or label eggs in a manner intended to deceive a purchaser into believing that the eggs have been graded under the Federal Regulation”.
Gray, Burnbrae and the egg board have, in their court filings, denied any and all allegations of wrongdoing.

The allegations and denials have yet to be tested in court.