Proposed amendment to the term contract clause under R.R.O. 1990, Regulation 440 (Vegetables for Processing - Marketing) under the Farm Products Marketing Act.
Regulation - Other
Bill or Act:
Farm Products Marketing Act
Summary of Decision:
An amendment to the term contract section was filed with the Registrar of Regulations and is now in effect.
The amendment extends the notice period for the termination of a contract without cause to no less than one year.
February 8, 2018
Summary of Proposal:
After the completion of extensive consultations, the Ontario Farm Products Marketing Commission (Commission) finalized regulatory amendments to Regulation 440 on December 21, 2017.
The amendments included the addition of a clause that outlined two specific ways in which a party can terminate a term contract:
1) Processors or green shippers will be able to terminate a term contract immediately for cause if a producer fails to grow vegetables in a given year as required by that contract.
2) Either party will be able to terminate the contract immediately without cause if notice is given to the other party by December 31 in any year.
The term contract amendments were based on stakeholder feedback received during the consultation period.
As the term contract amendments were not part of the Commission's original Regulatory Registry posting during fall 2017 they do not come into effect until December 1, 2018 to provide stakeholders with an opportunity to submit feedback.
The OPVG board, with the support of its growers, has proposed an amendment to the term contract clause, which would extend the notice period for termination without cause to no less than one year. The Ontario Fruit and Vegetable Processors Association has expressed support for the proposal.
In addition, OPVG has proposed to review and revise its own board regulations with respect to termination of term contracts for cause with a view to creating more certainty for how and when a term contract can be terminated. OPVG and the Commission have committed to work together to ensure these changes are reflective of the needs of the industry, however this is not part of the proposed amendment to Regulation 440.
Subject to the review of feedback received during the posting period, the intention is for the proposed amendment to be finalized in spring 2018.
Ontario Farm Products Marketing Commission
1 Stone Rd W, Guelph, N1G 4Y2
March 29, 2018